PARIS (Reuters – European forward power prices dropped further Friday. The sanctions on Russia in response to its invasion of Ukraine are yet to have an impact on European energy supplies. [NG/EU][O/R]

An industry source also reported that Gazprom, Russia (MCX) will resume supplies through the Yamal Europe gas pipeline from Poland into Germany. The move comes amid high demand for gas in Europe from Italy.

On Friday, Russian missiles attacked Kyiv, Ukraine’s capital. The European Union prepared a third round sanctions against Moscow. This would continue to target Russia’s financial and energy sectors. It also specified the end of all coal imports from Russia-occupied Donbass.

Due to Russia’s exposure, some international businesses are now preparing to face additional sanctions.

The Netherlands suggested that Russia be exempted from the SWIFT international interbank payments system. France stated some reservations about France’s position, but Paris was not.

Poland, who is dependent on coal to provide most of its electricity, suggested that the bloc include Russian coal imports as part of its sanctions package.

Europe must secure huge quantities of natural gas in order to prevent soaring energy prices next winter and crippling energy bills.

Analysts at Enervis believe Russia’s invading Ukraine could lead to Germany changing its energy transition course. They also said that Germany can continue operating nuclear power plants as well as a slow phase out of coal.

Mirko Schlossarczyk, Enervis analyst, stated that electricity prices will remain high despite long-term high CO2 and gas prices.

“Compared to a reference that assumed a drop in the price of gas to 25 Euros/MWh from 2030, the annual basis on wholesale electricity markets has increased to between 140 and 160 euros/MWh,” he said.

In the short-term, however, the front month and first quarter contracts in France and Germany fell in afternoon trading Friday.

German baseload power fell 18.4% to $146.85 euros (£165.13) for delivery in 2023 after it hit a record high of 184.50 euro on Thursday.

For 2023 delivery, the equivalent French baseload power fell 12.1% to 184.50 euros.

The European CO2 allowances expiring in December 2022 rose 0.9%, to 87.84 Euros per tonne. Meanwhile, hard coal for Northern European Delivery fell 13.1%, to $126 a tonne.

($1 = 0.8893 euros)