Dark Doldrums = 1½ Euro Per kWh

Dunkelflauten cost the consumers large sums plus unpleasant surprises for those who do not monitor their meter closely.

Yesterday, a confluence of negative factors led Northern Europe to experience the biggest hike in electricity prices seen for a long time.

In the late afternoon hours of Friday, the price of electricity rose to 1.5 euro for a kWh in most Northern countries, Germany, UK and Netherlands. Ten times the normal for the afternoon ‘rush-hour’ when households normally turn on light, heating, kitchen appliances, AV equipment, washing machines and start preparing for dinner and weekend activities. That was just the peak hour in a day where the electricity price was extraordinarily high all day.

The weather was to blame. No wind and no sun at the same time is toxic for electricity production in a region so hooked on sustainable green energy production. Such a confluence of negative factors at one time is often called ‘a perfect storm’ - only that this one is the opposite: A lack of wind and sun to run the wind turbines and the sun farms.

Screen dump showing the hourly electricity prices on past Thursday of the Danish utility Andel

Experts have long warned that the rapid, and successful, deployment of alternative electrical energy production is ill balanced and very badly prepared for this kind of situations. Put simply, if both wind and sun are missing at the same time, you need to have backup power. In general, the traditional fossil power plants are able to set more fire under the kettles, so to speak, and compensate for the lack of cheap green energy.

However, the perhaps over-zealous politicians, spurred on by EU-induced competition of who comes first to achieve zero emissions electricity, have closed so many traditional power plants that there is not enough active plants available to compensate for the lack of green electricity. Or, seen from the other side, green energy has won big time and taken a dominant position. As the saying goes, it has ‘won like hell’, because it is now responsible for energy security that is cannot deliver.

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Disclaimer: This post should not be taken as a disapproval of alternative (non-fossil) energy production. As mentioned, the problem is with the unrealistic implementation according to the EU green deal policy. Phasing out fossil power plants too early, presumably to save on maintenance costs and to meet decarbonization goals early, is at the root of the imbalance problems. Germany’s sudden closure of nuclear plants is another reason, as is cutting off the gas supplies from Russia.

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Germany

Dunkelflauten (dark lulls) is the term for this situation, combining the German words for darkness and wind lull (or doldrums). It has become a standard term in the industry, also in other languages.

Germany maxed out at 1.3 euro per kWh on the open exchange. Consumer prices vary as there is a local transmission fee on top, depending on utility. The German online magazine Chip writes:

Low wind power generation causes stock exchange electricity prices to explode

Dunkelflauten, as the phases in which particularly little wind power can be generated are called, pose major problems for the energy markets. Last month, stock exchange electricity prices rose due to a dark lull to a level last reached during the energy crisis following the Russian attack on Ukraine.

"German wind generation is even lower than the already low forecasts," said Sabrina Kernbichler, senior electricity analyst at Energy Aspects Ltd, according to a report by the news agency Bloomberg. Germany's ability to import electricity is also limited by "limited available intraday transmission line capacities" during the hours of high demand.

Gas consumption in Germany rose to 16.8 gigawatts as a result of the dark lull - the highest level since December 2022. Electricity generation from lignite and hard coal was also ramped up.

Norway

Norway is up in arms about the energy prices and wants to cut energy connection to Denmark which, in turn, connects further to Germany and the European transmission network. The Norwegian energy minister describes the situation as most unfavorable and politicians in general seems to have concluded that Norway somehow got trapped. EU wants to use the enormous hydroelectric reserve in Norway as a buffer to smooth out the dunkelflauten and other lulls in energy production. Norwegians seem to be blindsided that this leads to higher fluctuating energy prices in Norway itself.

This morning, a well-known Norwegian businessman and investor states his deep concerns to the newspaper Dagbladet:

- This is a complete disaster, says investor Øystein Stray Spetalen about the dramatic electricity prices this week. On Thursday, they were as high as 13 kroner, in the price area of ​​Southwest Norway.

- What is surprising now is that the gas price in Europe is low. This is because of speculators who are speculating with Norwegian electricity, back and forth.

He explains what happens as so-called "frontrunning": Within a few days, speculators agree to buy so much electricity that there is a shortage - and then sell when prices are at their peak.

- We are all being deceived because Norwegian politicians are so naive.

- It's the whole system. Danes and Germans and trading companies around Europe sit around and manipulate, while Norwegians go bankrupt because naive, Norwegian politicians don't understand what they are exposed to.

He calls the trading companies "parasite companies" that exploit the weaknesses in ACER (the EU's energy agency) and the pricing of daily electricity prices and "steal billions" from electricity customers.

Spetalen believes the problem is that politicians have entered into agreements on electricity exchange with Europe, of which they have not seen the consequences.

- There is incompetence from politicians all the way. And when the problem arises, they do not have the competence to solve it.

- This is so serious for Norway that it is unbelievable. There is only one thing to do: Cut those cables tomorrow!, says Spetalen.

Concerns in the EU

The Norwegian reports are causing concern in the EU, as it goes directly against their plans to use Norway to equalize and balance electricity prices across Europe. But that is not the only matter, because Norway is also one of the largest suppliers to EU when it comes to both hydropower and oil. Many EU countries have, in an attempt to replace Russian oil, made Norway their primary gas supplier.

Norway is still not a member of EU, but they will have national elections next year and the energy prices will be a major subject in the campaign.

Still from the live chart showing transmission just now. Right now, the price is 1.97 kr/kWh. The international flows are - net import from Norway and Sweden, net export to Germany, England and Holland.