LITTLETON, Colorado, June 26 (Reuters) - Scores of cities across Europe are sweltering under record temperatures that are boosting demand for cooling systems while forcing utilities to scale back power production to avert outages.
The double whammy of higher electricity demand and lower supply is placing unprecedented strain on the region's power grids that are already struggling to accommodate rising electricity use from data centers, EVs and heat pumps.
Here is a breakdown on how to track the fallout from the ongoing heatwave across Europe's power systems, where power prices and generation mixes remain in constant flux as a result of the stress.
Many of Europe's largest power markets have day-ahead and intraday prices which provide useful clues on expected system conditions, and reveal several things at once.
High and rising prices indicate that demand is expected to remain strong while supply is set to remain tight.
Rising power prices can also reveal which power source is setting the marginal price for production in key markets, thanks to the so-called merit order pricing system.
In most European power markets, the most expensive power source needed to meet demand sets the price for the whole market, which is often gas-fired plants but can also be coal, nuclear and hydro power systems.
High day-ahead prices can therefore indicate which technology is setting the marginal price in which market, and what fuel and carbon costs will feed through each system as power firms adjust output mixes to balance market needs.