Europe’s energy crisis is making the market nervous. And analysts expect record-high prices to persist

Published

4 years ago

September 16, 2021

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Round bales of straw drying on the field are seen in front of the power station operated by RWE AG near Rommerskirchen, Germany on August 10, 2021. The cost of natural gas and electricity has surged across Europe.

Ying Tang | NurPhoto | Getty Images

LONDON — European power prices have spiraled to multi-year highs on a confluence of factors in recent weeks, ranging from extremely strong commodity and carbon prices to low wind output.

What’s more, the record run in energy prices is not expected to end any time soon, with energy analysts warning market nervousness is likely to persist throughout winter.

The October gas price at the Dutch TTF hub, a European benchmark, was seen to climb to a record high of 79 euros ($93.31) a megawatt-hour on Wednesday. The contract has risen more than 250% since January, according to Reuters, while benchmark power contracts in France and Germany have both doubled.

In the U.K., where electricity bills are now the most expensive in Europe, power prices have soared amid the country’s high dependence on gas and renewables to generate electricity.

British day-ahead electricity prices rose nearly 19% to reach 475 pounds ($656.5) on Wednesday, Reuters reported. The contract was already trading near record highs shortly after a fire at a U.K.-France power link cut electricity imports to Britain.

“By far the biggest factor is gas prices,” Glenn Rickson, head of European power analysis at S&P Global Platts Analytics, told CNBC via email.

Higher gas prices have also been a “big driver” in lifting carbon and coal prices to record highs too, Rickson said, although he noted there are other supporting factors at play, such as low wind generation and nuclear plant unavailability across the continent.

Carbon prices in Europe have nearly trebled this year as the European Union reduces the supply of emissions credits. The EU’s benchmark carbon price climbed above 60 euros per metric ton for the first time ever in recent weeks, trading slightly below this threshold on Thursday.

The EU’s Emissions Trading System is the world’s largest carbon trading program, covering around 40% of the bloc’s greenhouse gas emissions and charging emitters for every metric ton of carbon dioxide they emit. Record carbon prices have made highly polluting sources of energy generation even less attractive because coal, for example, emits more carbon dioxide when burnt.

Rickson said the outlook for European power prices this winter will be “highly dependent” on gas prices, adding that he expects gas prices to rise even further in the coming months. “Aside from the ‘average’ picture, we expect prices to be highly volatile, with swings from low or even negative hourly prices when wind generation is high, to very high prices as already seen when wind is low, and demand is high.”

How did we get here?

European gas prices have accelerated since the start of April, when unseasonably cold weather conditions meant Europe’s gas in storage dipped below the pre-pandemic five-year average, indicating a potential supply crunch.

Europe has since struggled to bring gas supplies that are necessary for the winter period back to where they should be. An economic rebound as countries eased Covid-19 restrictions also coincided with higher-than-expected demand that led to a shortage of gas.

An output filtration facility of a gas treatment unit at the Slavyanskaya compressor station (operated by Gazprom), the starting point of the Nord Stream 2 offshore natural gas pipeline. According to Russia’s Deputy Prime Minister Alexander Novak, the construction of Nord Stream 2 will be completed by the end of this year.

Peter Kovalev | TASS | Getty Images

Further to this, Russia has been seen to slow its delivery of piped natural gas to the region, raising questions about whether this may be a deliberate move to bolster its case for starting flows via Nord Stream 2. The controversial pipeline, bringing natural gas to Europe from Russia, bypassing Ukraine and Poland, is soon expected to be fully operational and could resolve some of the region’s supply problems.

This deficit is “making the market nervous as we approach winter,” Stefan Konstantinov, senior analyst at ICIS Energy, a commodity intelligence service, told CNBC. “That is coupled with the very significant competition for LNG supplies from Asia and South America, which is driving gas prices up.”

Climate crisis concerns

Earlier this month, soaring gas prices and low wind output prompted the U.K. to fire up an old coal power plant to meet its electricity needs.

The move raises serious questions about the government’s environmental commitments amid the climate crisis. To be sure, coal is the most carbon-intensive fossil fuel in terms of emissions and therefore the most important target for replacement in the proposed pivot to renewable alternatives.

When asked how the U.K.’s decision to turn to coal could possibly be squared with the urgent need to dramatically scale down fossil fuel use, Konstantinov replied: “It’s a bit ironic isn’t it?”

Activists march with flags and placards, during the march at Extinction Rebellion’s Nature Protest held in Central London about how nature is in crisis.

Loredana Sangiuliano | SOPA Images | LightRocket | Getty Images

“If there was enough wind, it could maybe meet more than half or two-thirds of U.K. power demand on a relatively low power demand day. But instead what we are seeing is that actually we’ve got no wind and we are forced to fire up polluting coal-fired generation.”

“At first glance, that doesn’t tally up with the government’s ambition to decarbonize. But this is very much driven by the intermittent nature of renewables: both wind and solar,” he added.

The U.K. has committed to phasing out coal power completely by Oct. 2024 to cut carbon emissions.

“The fundamental drivers, i.e. high gas prices and high carbon prices, we at ICIS believe they are here to stay for the coming months,” Konstantinov said.

Analysts at Wood Mackenzie, a global natural resources consultancy, also expect U.K. and European gas prices “to remain elevated at current levels throughout winter.”

“A recovery in UK gas production is critical for this winter,” they added. “And going forward, investment into domestic gas supply remains crucial to ensure a smooth energy transition to renewables and new technologies.”

Environment

Here it is: the first-ever electric Type D school bus from Thomas Built

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4 hours ago

October 28, 2025

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Here it is: the first-ever electric Type D school bus from Thomas Built

Thomas Built Buses introduces Wattson, the company’s first electric Type D school bus

The school bus experts at Thomas Built have just released the first all-electric, square-bodied Type D school bus in the company’s storied history – and they’ve given their new bus a friendly, pun-tastic name. Kids, meet Wattson!

Properly called the Saf-T-Liner eHDX2 Wattson, this latest transit-style Type D bus from North Carolina-based Thomas Built combines a flat front, high seating capacity, and superior driver visibility with clean, quiet, electric power from Cummins Accelera.

“Wattson represents our next step in electrification,” said TJ Reed, president and CEO of Daimler Truck Specialty Vehicles. “(Wattson) reflects our belief that the best electric solutions are the ones that feel familiar, fit within your fleet and are built to last. That’s what we’ve heard from our customers, and that’s what we’re delivering.”

The bus offers 150 miles of estimated range thanks to a huge 246 kWh li-ion battery pack. That battery funnels electrons to the same, ultra-efficient 295 hp 14Xe eAxle with 750 lb-ft of peak tq as the recently-revealed Jouley, offering more than enough “get up and go” to get kids safely across multilane highways and up even the gnarliest rural mountain inclines. And, of course, without the freezing concerns that can stop a diesel fleet cold during extreme temperature drops.

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And, because Wattson is based heavily on Thomas Built’s existing Type D body, schools’ preferred upfitting solutions should bolt right in. “We know electrification can feel like a big step,” continued Reed. “With Wattson, we’re making that step easier by giving districts a familiar Type D solution they already trust – now in electric.”

Wattson is available for order now, with first deliveries scheduled for early 2026. The bus is capable of 120 kW DC fast charging, and is V2G capable.

Electrek’s Take

2026 Saf-T-Liner eHDX2 Wattson; by Thomas Built.

It’s almost universally accepted that school buses are prime candidates for electrification. They tend to operate on short, local routes, in stop-and-go traffic, and in close proximity with some of the most vulnerable populations in the country, in terms of respiratory illness and physical safety (just imagine a kid trying to yell “STOP!” at a bus driver and being heard over the din of noisy kids and a revving diesel). The fact that electric school buses can reduce a district’s operating costs and serve the public as a portable power center in an emergency are just icing on the electric cake.

Here’s hoping all our kids’ schools have a chance to trade in their gross diesel school bus for something like Thomas Built’s Wattson sooner than later.

SOURCE | IMAGES: Thomas Built.

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Environment

Bako Motors builds solar-powered tiny electric cars that sip sunshine

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5 hours ago

October 28, 2025

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Bako Motors builds solar-powered tiny electric cars that sip sunshine

Electric vehicles are known for plugging in – but one startup wants them to simply soak up the sun instead. Bako Motors is building compact electric cars and cargo vans with solar panels on the roof, letting them charge directly from sunlight and cut their dependence on wall sockets altogether.

It’s not an entirely novel idea. But unlike flashy startups like Aptera, Bako is approaching it with an actually commercially viable solution. And now the company is joining several other African-based EV makers hoping to help the continent leapfrog its way towards more sustainable transportation.

While most EVs still rely on grid charging – often from a fossil-fuel-heavy mix in Africa – Bako’s small vehicles can harvest free energy straight from the sky. According to founder and CEO Boubaker Siala, the roof-mounted solar cells can provide more than half of a vehicle’s daily energy needs. For its commercial model, the B-Van, that translates to about 50 km (31 mi) of solar-assisted driving per day, or roughly 17,000 km (10,500 mi) per year without ever plugging in.

Of course, drivers do still have the option of plugging into an EV charger to top up the battery more quickly, but soaking up extra sun all day may mean that many owners can get away with infrequent grid-charging stops.

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The B-Van can haul up to 400 kg (882 lb) of cargo and offers 100–300 km (62–186 mi) of total range, starting at around US $8,500. Its smaller sibling, the Bee, is a two-seat urban runabout with 70–120 km (44–75 mi) of range and a 44 km/h (27 mph) top speed, priced from US $6,200. A third model, the X-Van, is now on the drawing board with space for two passengers and extra cargo.

More than 40% of Bako’s parts are sourced locally – including the steel for the frame and lithium-iron-phosphate batteries – creating jobs while reducing import costs. A second, larger factory is set to open in 2026, boosting capacity to 8,000 vehicles per year for Africa, the Middle East, and Europe.

By combining affordability, local manufacturing, and solar charging, Bako Motors is carving out a niche that fits Africa’s climate and infrastructure realities. In a market where range anxiety and unreliable grids still hold many buyers back, these sun-sipping EVs might just be the independence-promoting solution that drivers need.

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Environment

Mining execs embrace ‘phenomenal’ rare earths interest from the Middle East

Published

8 hours ago

October 28, 2025

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Mining execs embrace 'phenomenal' rare earths interest from the Middle East

Guests enjoy the Fortune Global Forum 2025 Gala Dinner on October 26, 2025 at Diriyah Gate, Riyadh, Saudi Arabia.

Cedric Ribeiro | Getty Images Entertainment | Getty Images

Mining executives have welcomed a sharp upswing in investor interest from the Middle East, as Gulf states seek to expand their critical mineral ambitions and take on established global players.

Critical minerals refer to a subset of materials considered essential to the energy transition. These resources, which tend to have a high risk of supply chain disruption, include metals such as copper, lithium, nickel, cobalt and rare earth elements.

“The interest in rare earths in this part of the world is phenomenal,” Tony Sage, CEO of U.S.-listed rare earths miner Critical Metals, said during a business trip through the Middle East.

“I didn’t expect it because, you know, they can’t mine it. There [are] really no discoveries in this area, but they want to be able to participate somehow in the downstream,” Sage told CNBC by telephone.

His comments come as policymakers and business leaders flock to Saudi Arabia’s Future Investment Initiative (FII) in Riyadh, an event nicknamed as the “Davos in the Desert.”

The annual event, which got underway on Monday, is being held under the theme: “The Key to Prosperity: Unlocking New Frontiers of Growth.” It is expected this year’s FII will lean into areas such as artificial intelligence, particularly as the oil-rich kingdom continues with its mission to diversify its economy.

A wheel loader takes ore to a crusher at the MP Materials rare earth mine in Mountain Pass, California, U.S. January 30, 2020.

Steve Marcus | Reuters

Analysts say Gulf states, led by the likes of Saudi Arabia and the UAE, are increasingly seeking to leverage their financial capital and geographic location to capture critical minerals market share.

A series of targeted acquisitions and international partnerships forms a key part of this regional strategy, according to an analysis by the International Institute for Strategic Studies (IISS), with Gulf states seeking to present themselves as alternative partners to Western nations.

Critical Metals, for its part, has partnered with Saudi Arabia’s Obeikan Group to build a large-scale lithium hydroxide processing plant in the kingdom.

A strategic push

Kevin Das, senior technical consultant at New Frontier Minerals, an Australian-based rare earths explorer, linked investor interest in rare earths from the Middle East to exponential growth in the field of AI.

“It’s no surprise that you’re seeing interest, not just in the Western world, but spreading into the Gulf States because I think people are realizing that we’re probably on the cusp of an AI boom,” Das told CNBC by telephone.

“If you start to see the emergence of robotics, every robot is going to need these rare earths. And I think the supply is only going to get tighter,” he added.

Rare earth elements have emerged as a key bargaining chip in the ongoing U.S.-China trade war, although global stocks rallied on Monday amid investor hopes of thawing tensions between the world’s two largest economies.

U.S. officials have touted the prospect of China delaying strict rare earth export controls as part of a high-stakes summit between President Donald Trump and China’s Xi Jinping on Thursday.

Rare earths refer to 17 elements on the periodic table whose atomic structure gives them special magnetic properties. These elements are widely used in the automotive, robotics and defense sectors.

U.S. President Donald Trump meets with Saudi Crown Prince Mohammed bin Salman during a “coffee ceremony” at the Saudi Royal Court on May 13, 2025, in Riyadh, Saudi Arabia.

Win Mcnamee | Getty Images News | Getty Images

Shaun Bunn, managing director at London-listed Empire Metals, said his company had also received considerable investor interest from the Middle East.

“I think that it is very much part of the kingdom’s strategic push to diversify away from its oil. I mean, they are always going to make the most money out of oil at the moment at least, but they are trying to diversify,” Bunn told CNBC by telephone.

Critical mineral ambitions

Analysts have flagged a number of barriers facing the Gulf states’ push for critical minerals, however, noting that regional players remain marginal producers at present.

“Many of Saudi Arabia’s mining ventures remain in early or even conceptual stages, and the country still depends on foreign partners for expertise, such that it may take years for Saudi Arabia, and the Gulf states more generally, to scale up enough to dent Chinese dominance or to fully meet Western demand,” Asna Wajid, research analyst at IISS, said in an analysis published in late July.

“Many in the West, moreover, may be wary of replacing their dependence on China with dependence on the Gulf states, which already exercise considerable strategic leverage due to their oil and gas supplies,” Wajid said.

China is the undisputed leader of the critical minerals supply chain, producing roughly 70% of the world’s supply of rare earths and processing almost 90%, which means it is importing these materials from other countries and processing them.