Europe’s energy crisis got even worse on Tuesday as a shortage of natural gas, nuclear outages, declining wind power output, and cold weather boosted prices. 

The gas price at the Dutch TTF hub, the benchmark gas price for Europe, soared 10% to a new record high of 165 euros per megawatt-hour after gas entering Germany at the Mallnow compressor station plunged to zero. Flows were diverted eastward to Poland.

European gas prices hit a record high. 

For some context, European NatGas is trading at an oil-barrel-equivalent price of $340 (why aren’t more producers shifting?)

Compared to US NatGas, which has traded in an arbitrageable range for15 years, things are out of control…

And all of this as gas flows into Europe plummet. 

Russia’s Gazprom PJSC has steadily reduced gas flows to Europe as the controversial Nord Stream 2 pipeline had its certification

delayed until possibly July

. No new flows into Europe are forcing utilities to drain their gas storages (already at seasonal lows). Some utilities have had to restart fossil fuel generators to avoid grid disruption. 

The energy crisis worsened in the last several days as France; usually, an exporter of power, has been desperately seeking imports and even restarted fuel-burning generators as the country’s top power utility, Electricite de France SA, halted four

nuclear reactors

accounting for 10% of the country’s nuclear capacity, straining power grids as the continent copes with cold weather.

“It’s illustrating how severe it is when they’re actually starting to burn fuel oil and importing from all these countries,” said Fabian Ronningen, an analyst at Rystad Energy. “All the unexpected maintenance is also causing the extremely high cost of supply, which is reflected in the market prices.”

30% of France’s nuclear capacity will be offline in the coming weeks. Germany will lose about half its nuclear capacity next year. As the Northern Hemisphere winter begins, the continent will be at the mercy of Mother Nature. 

Another issue developing this week is that Germany’s power output from thousands of wind turbines has plunged to five-week lows as cold weather strains the grid. 

As a result of the grid strain, German power prices climbed 30% to a record 431.98 euros per megawatt-hour. 

It looks like the European energy crisis is rapidly accelerating and could get even worse as cold weather is expected to persist for the coming weeks.