Electricity prices in the UK has led to a surge in demand

Electricity prices in the UK soared to record levels on Monday as freezing temperatures set to lead to a surge in demand for electricity, combined with a supply shortage caused by a drop in wind power. Electricity prices in the UK settled at a record 674.78 pounds per megawatt hour on Monday after hitting a record high of 2,585.80 pounds per megawatt hour, data showed.

The Met Office issued a yellow weather warning for snow and ice until last Thursday, and temperatures in London are expected to drop to minus 3 degrees Celsius (26.6 degrees Fahrenheit) by Sunday night, increasing the need for heating. Electricity consumption is expected to peak at 46,695 megawatts at 5pm on Monday, up from a peak of 42,930 megawatts on Sunday, according to National Grid.

The cold snap is expected to last for seven days in north-west Europe, at the same time as reduced power supplies due to weaker winds. Wind modelling suggests the UK will have almost zero wind power on Sunday and very low power on Monday, with some recovery expected on Tuesday.

Outside the UK, German electricity prices rose 33 per cent to €433.93 per megawatt hour, the highest since September 13, while the spot contract for EDF rose 40 percent to €465.49 per megawatt hour.