Bloomberg: EU Power Set for Biggest Gain in 10 Months Amid Russia Sanctions

European power prices for next year are headed for the biggest monthly gains since September amid concern sanctions against Russia will boost the cost of coal and gas, raising production costs at utilities.

The German 2015 contract, Europe’s benchmark, climbed 2.2 percent in July, broker data compiled by Bloomberg show. Respective advances for equivalent French and Nordic prices of 1.3 percent and 4.8 percent are also the largest in 10 months.

European Union governments agreed July 29 on their most sweeping sanctions against Russia to date in another attempt to curb President Vladimir Putin’s intervention in Ukraine, raising concern the bloc may be more vulnerable to cuts in its supplies of natural gas and coal. The EU imported 46 percent of its gas from Russia last year, while coal imports from the eastern neighbor amounted to 31 percent of demand, data from the bloc’s statistics agency show.
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