European power prices hit a record for a 5th day straight as a perfect storm rocks the continent's energy system

• European power prices surged to a record high for a fifth straight day as the energy crisis intensifies.
• German baseload year-ahead power prices topped 500 euros on Tuesday — up almost 500% from a year earlier.

European power prices have surged to a record high for the fifth day running as the Russian squeeze on natural gas flows and fears about other energy supplies rock the continent.

German baseload year-ahead power, the benchmark European price, rose 5.5% to hit a record 505 euros ($512) per megawatt hour Tuesday, Bloomberg data showed.

A surge in prices for natural gas — a key input in much electricity generation — is at the root of the roughly 500% increase in power prices over the last year. French power prices are running at record highs of more than 600 euros a megawatt hour.

Natural gas prices have spiraled higher in 2022 as Russia slashed exports to Europe. Last month, its state-owned company Gazprom cut the flow of gas through the Nord Stream 1 pipeline to Germany to just 20% of capacity.

Dutch TTF natural gas futures, the European benchmark, were up almost 8% Tuesday to 237.50 euros a megawatt hour, their highest level since early March.

On top of the drop in Russian supplies, European governments are worried that other sources of energy could deliver less than hoped this year. In France, for example, nuclear power output is forecast to be its lowest in years, as plants struggle with maintenance issues.

Meanwhile, low water levels on the river Rhine, which runs through Germany, have threatened to stymie the flow of commodities such as diesel and coal through central and western Europe. That could push industrial plants toward using natural gas instead, adding to the pressure on prices.

Companies and consumers are struggling under the surge in the cost of energy, which many economists expect to push the eurozone into a severe and lasting economic downturn in the coming months.

"We expect the combined drag of a squeeze on purchasing power and depressed sentiment to tip the region into recession this year," JPMorgan economists said in a note last week.