Europe’s power grids are creaking under the strain of extreme heat, with electricity demand rising fast and supply patterns failing to match up – triggering wild price swings and growing market volatility.
Jean-Paul Harreman, Director at Montel Analytics, has sounded the alarm as soaring temperatures across southern and western Europe disrupt the delicate balance between supply, demand and flexibility.
Temperatures are currently up to 10°C above normal in parts of Spain and France, pushing air conditioning demand through the roof.
Power use is peaking earlier in the day and again sharply in the evening – just as solar generation fades, creating what grid experts call a “solar cliff”.
That mismatch is hitting energy markets hard. In countries like Germany and France, day-ahead electricity prices are plunging below minus €100 per megawatt hour during sunny hours, then bouncing above €300/MWh by early evening.
Fossil fuel plants are forced to ramp up quickly to meet demand – an expensive and inefficient process many were never built for.
Baseload sources like nuclear are also feeling the heat. In France, EDF has already warned that output at the Bugey plant may be reduced due to high river temperatures, with others under close watch.
Environmental rules cap how warm discharged cooling water can be, meaning river-based nuclear stations are operating with narrower margins.
Ancillary services markets – the hidden plumbing of the power system – are flashing red too. Germany’s balancing prices have doubled, and Italy’s fast reserves are hitting record highs.
“The paradox is striking: abundance at noon, scarcity by night,” Harreman said.
The crisis is a clear sign that Europe’s energy system is being reshaped by climate extremes.
Analysts are calling for urgent investment in storage, demand-side response and smarter market design to handle increasingly unpredictable conditions.
Without action, the cost of keeping the lights on will only climb.
