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The Iberian Peninsula is facing an exceptionally hot summer, with forecasts suggesting the possibility of reaching historic temperature records. Since the last week of May, the region has experienced a significant increase in heat, recording maximum temperatures not seen in over four decades. This phenomenon, which is related to climate change trends, poses a significant challenge for the energy sector, as a considerable rise in electricity demand is anticipated.
The largest heat wave in recent decades is expected to occur during the last weekend of June, which could make the summer of 2025 one of the hottest in history. The intensive use of cooling systems and air conditioning during days of high temperatures will increase electricity demand, complicating supply. Extreme conditions could also affect the efficiency of power generation plants, directly impacting their operations.
Nuclear power plants and gas combined cycles, key elements in electricity production, may face difficulties in operating optimally due to the need for cooling in extreme climates. This uncertainty, combined with rising demand, exerts upward pressure on prices in the electricity market.
Additionally, the supply chain is affected by geopolitical tensions in the Middle East, particularly between Iran and Israel. These tensions create volatility in the natural gas market, an essential resource for electricity generation in Europe, increasing the likelihood of disruptions that could further impact sector prices.
In this context, managing risk becomes crucial, especially for companies with high energy consumption. Hedging tools, such as bilateral contracts and futures markets, emerge as key strategies to mitigate the impact of price volatility during this intense summer.
To address these challenges and analyze the latest trends in the European energy sector, AleaSoft Energy Forecasting will organize a webinar on July 10th. In this event, industry experts will gather to discuss the evolution of the PPA market and the role of energy storage in the new energy context, providing a valuable space for industry professionals.
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Source: MiMub in Spanish