The hot weather forecast for this summer will result in higher electricity prices as a result of a combination of factors, increased demand being a key factor, market analysts believe.

Besides the expected increase in the use of air conditioners and other cooling appliances, an improvement in economic performance experienced around many parts of Europe can be expected to increase overall consumer demand, industrial output and, as a result, energy demand. This should elevate electricity prices.

The closure of conventional power stations as part of the EU’s effort to reduce greenhouse emisions and increasing support for the renewable energy sector are additional factors that are expected to elevate electricity costs this summer.

In addition, low water levels at hydropower stations in many European countries increases the likelihood of insufficient electricity generation on the continent this summer.

Dam levels in Greece are believed to be between 20 and 25 percent lower compared to a year ago, primarily as a result of last winter’s energy crisis, which forced the main power utility PPC to turn to water reserves for electricity generation during the winter.

Last weekend’s landslide at the PPC mine in Amynteo, northern Greece, which stopped production at the utility’s two lignite-fired power stations in the area, has only made matters worse for the local grid. Also, repair work at a nearby power station, Kardia 4, not expected to be completed before mid-July, adds to the concerns that the grid will be placed under considerable strain this summer.

In addition, increased electicity prices in other parts of Europe are bound to impact the Greek market. Electricity imports will cost more while local electricity producers will have greater incentive to export electricity to other markets.

Energy minister Giorgos Stathakis has assured energy supply in Greece will roll smoothly during the summer, noting that precautionary measures have been taken. PPC’s two Amynteo power stations affected by the landslide at the region’s mine will be supplied coal from other mines, according to the minister.

Despite the measures, hot temperatures will inevitably increase electricity demand and prices, a favorable development for producers and traders but an unpleasant prospect for retail suppliers and consumers.