Europe’s reference price for electricity on Tuesday exceeded the threshold of 500 euros per megawatt-hour for the first time, increasing pressure on companies and households, Bloomberg reported, cited by Agerpres.

In Germany, the price of electricity next year rose by 6.4% to 508 euros per megawatt-hour on the European Energy Exchange AG. We are talking about an advance of about 500% over the last year, caused, in particular, by the reduction of Russian gas supplies.

As the cost of energy continues to rise, industry is feeling the negative effects. Nyrstar NV is the latest company to be affected, announcing on Tuesday the closure of its Budel zinc plant in the Netherlands – one of Europe’s largest.

“The longer the period of growth of these prices, the stronger the impact on the economy will be. The scale of growth and the scale of the crisis cannot be compared to anything that has happened in recent decades,” said Daniel Kral, an economist at Oxford Economics.

Problems of electricity and natural gas in Europe

European countries are bracing for possible power shortages this winter, and some are considering optimizing supplies to certain industries to meet substantial demand.

Drought and intense heat in Europe have reduced the flow of rivers and reservoirs, which are crucial for the supply of hydropower in some countries.

In Germany, low river levels could exacerbate energy supply problems as transport shortages affect government plans to temporarily increase coal use.

“We are already seeing negative consequences for the industry after the long-term increase in gas prices. And with the new gas tax announced by Germany this week, households will also feel the pressure,” warned Bloomberg analyst Kesavartini Savarimuthu.