German power prices see steep rise as closure of nuclear capacity looms

German power prices have soared in recent days, as the country prepares to close half of its nuclear power capacity by the end of the year despite the energy crisis unfolding in Europe.

Germany's government committed to phasing out atomic energy in the wake of the 2011 Fukushima nuclear disaster. The country is due to close the Grohnde, Gundremmingen C and Brokdorf nuclear reactors by the end of this year, removing more than 4 GW of power generation from the system. It is set to close the remaining 4 GW by the end of 2022.

The day-ahead price for the German and Luxembourg markets at Nord Pool has risen to €417 ($471)/MWh as of 11:00 GMT on December 22, down from a high of €432/MWh on December 21. This was up from €331/MWh on December 20 and €120/MWh on December 19.

Nuclear reactors are currently providing 10.75% of Germany's power. A further 37% comes from coal-fired generation, which despite increased carbon tax, has grown more competitive versus natural gas owing to the rise this year in the price of the latter, which currently supplies 15.2% of Germany's electricity.

Wind and solar plants are currently providing 10.2% and 5.5% of power respectively, meaning that they are operating at just 11.9% and 7.2% of their installed capacity.

Strain on the German grid will grow further as the country prepares to close another 6.4 GW of coal-fired capacity by 2023.