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Photographer: Alik Keplicz/AP Photographer: Alik Keplicz/AP

Poland’s power grid cut electricity supplies for industrial users for the first time in almost three decades as a heatwave entered its second week.

The reduction started at 10 a.m. in Warsaw as power prices for next week jumped to the highest level since December 2010 and spot electricity to a record. While households are not affected by the cuts, according to Prime Minister Ewa Kopacz, the government will on Tuesday discuss extending the period of lower supplies to companies until Aug. 30, Economy Minister Janusz Piechocinski told reporters on Monday.

“Unrelenting heat” will continue to affect much of east Europe this week after temperatures surged to August records in Poland last weekend, according to AccuWeather Inc. The weather conditions are cutting power production and hampering electricity transmission as low river levels result in cooling restrictions, while higher demand for air-conditioning squeezes the reserve margins required by the system.

“Our steps have helped stabilize the supply-demand balance as users have been prepared for this situation,” Piechocinski told reporters in the Warsaw suburb of Konstancin, after talks with the country’s power grid operator.

Heading for a European break? Heatwave continues in the east with 'red' heat warnings from Poland to Hungry. Chris F pic.twitter.com/udAvymDdcr — BBC Weather (@bbcweather) August 10, 2015

Premier Kopacz, whose Civic Platform party is trailing in opinion polls before October’s general election, said Poles had “no reason to panic” even as about 1,600 companies faced cuts in electricity supplies.

‘Boiling’ River

KGHM SA, Poland’s sole copper producer, said it will use its own power sources amid the restrictions, while Grupa Lotos SA said it would maintain “normal” oil-refinery operations for now. ArcelorMittal, the world’s largest steelmaker, is cutting output at its Polish smelters because of the electricity curbs, PAP news agency reported on Monday.

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Power plants owned by Enea SA and GDF Suez SA, which use water from the Vistula river to cool their facilities, face curbs in dumping the heated water back into the country’s largest internal waterway, Piechocinski said.

“We can’t let the river boil, it’s dangerous for the environment,” he said.

With some 4,000 megawatts of capacity missing from the system due to maintenance and cooling issues on Sunday and scarce wind output, power grid manager introduced supply cuts reducing demand by about 2,000 megawatts, Henryk Majchrzak, Chief Executive Officer of power grid operator PSE SA said. Remedial measures include intervention imports from neighboring countries and delays in planned power plant maintenance.

Surging Prices

The temperature in Warsaw stood at 32 degrees Celsius at 4 p.m. and was poised to rise as high as 35.4 degrees on Saturday, according to CustomWeather Inc. data on Bloomberg. It soared to 36.6 degrees Celsius on Aug. 8, a record for August, AccuWeather said on its website.

Polish week-ahead power surged 22 percent to 225 zlotys ($58.77) a megawatt-hour by 4:30 p.m. Warsaw time, broker data compiled by Bloomberg showed. The contract gained 9.5 percent in the previous session as utility Enea said cooling restrictions forced its Kozienice power plant to cut output by some 400 megawatts. Day-ahead power traded on Polish power exchange increased 70 percent to a record 464.95 zloty a megawatt-hour, exchange data on Bloomberg show.

“Assuming the heat persists, prices may keep rising unless wind generation increases,” Bartlomiej Kubicki, a Warsaw-based analyst at Societe Generale SA, said Monday by e-mail.

Under Polish regulations, electricity supply for industrial users can be restricted if other remedial measures are inadequate to keep power flows at required levels.