Calm weather and thick clouds led Germany into a “dark doldrum” in December, resulting in a 25% electricity import spike and soaring prices, exceeding one euro per kilowatt-hour. Critics argue this highlights flaws in the energy transition, but renewable energy data shows average prices fell significantly. Many power plants remained idle due to legal restrictions, raising concerns about the underutilization of reserve plants. Despite challenges, the future of renewable energy generation appears promising.
Calm weather conditions combined with thick cloud cover create what are known as dark doldrums, leading to a spike in electricity imports and soaring prices. But what prevents the activation of reserve power plants?
In mid-December, a significant event that critics of renewable energy had long predicted occurred: Germany experienced a dark doldrum. This term refers to the simultaneous lack of sunlight and calm winds, severely restricting the output from wind and solar energy sources. As a result, between December 11 and 13, Germany had to import about 25% of its electricity needs. The cost per kilowatt-hour skyrocketed, reaching over one euro during daily trading, compared to the usual five to twenty cents.
Industries that rely heavily on electricity and purchase it on the stock market were forced to scale back operations and send employees home. This situation has been cited by many as proof of a flawed energy transition. However, Professor Bruno Burger from Fraunhofer ISE in Freiburg, who has analyzed electricity market data for over ten years, argues otherwise. He points out that when there is excess wind and solar energy, negative prices on the stock market can occur.
The majority of electricity in Germany is now derived from renewable sources.
Consumers Benefit from Negative Prices
Interestingly, consumers purchasing directly from the stock market can sometimes receive money for their electricity usage. This phenomenon occurred for approximately 438 hours last year. Consequently, even with the extreme price surges in December, the average annual electricity price fell significantly to 7.8 cents per kilowatt-hour—an 18% decrease compared to 2020, the year prior to the Ukraine conflict. It is worth noting that in 2021, when six nuclear reactors were still operational, the average price per kilowatt-hour was 9.3 cents.
Every larger power plant is required to report its electricity generation on an hourly basis. Surprisingly, numerous power plants did not produce any electricity during the peak pricing hours, a finding supported by Professor Burger’s analysis.
The Federal Cartel Office and the Federal Network Agency are currently investigating whether power plant owners withheld electricity to manipulate prices and maximize profits from operational plants. However, no conclusions have been reached yet.
In May, the stock market experienced unprecedented conditions, with electricity prices plunging into negative territory for several days.
Underutilization of Power Plants
To understand the situation better, Plusminus reached out to owners of power plants that failed to deliver during the dark doldrum. They reported that nearly one-third of their plants were unavailable due to short-term defects. More alarmingly, a significant number of standby power plants were not permitted to generate electricity at all. These are reserve power plants that their owners intended to decommission but are kept operational by the state for emergency situations, with the government covering their costs.
The expenses for these reserves are subsequently reflected in the stock market prices. During the dark doldrum, 9.8 gigawatts of gas and primarily hard coal power plants were designated as reserves, equivalent to the output of about seven nuclear reactors. Although staff were present and ready to generate electricity, legal restrictions prevented reserve power plants from stepping in, even during critical times.
Reserves can only be utilized when a blackout is imminent and no other electricity sources are available throughout Europe, regardless of cost. This legal stipulation was enacted by the Merkel government in 2020.
By the end of 2024, Germany’s installed solar power capacity is expected to exceed 100 gigawatts.
Missed Opportunities for State Reserves
Professor Christof Bauer from TU Darmstadt, who advises the Höchst chemical park on energy procurement, finds it perplexing that Germany maintains around one-third of its large power plants as standby reserves, passing on the associated high costs to electricity consumers, yet fails to utilize these power plants to mitigate extreme price conditions.
Even advocates for the energy transition and long-term coal phase-out acknowledge that utilizing hard coal power plants as reserves for a few dozen hours annually would have a negligible impact on carbon emissions. Leveraging these state-funded reserves would be a far simpler approach than reactivating decommissioned nuclear power plants.
Data from the recent dark doldrum revealed that not only were many large power plants idled or defective, but tens of thousands of smaller plants across the country, which do not have to report their operations continuously, were also inactive. According to network operators, nine gigawatts of these smaller plants were disconnected despite the energy crisis, equivalent to the output of about seven nuclear power plants.
The greatest increase in electricity production from renewables was attributed to wind power.
Embracing Flexibility in Energy Generation
In Heidelberg, municipal utilities provide district heating to half of the city’s buildings and businesses. When low stock market prices arise from abundant wind and solar energy, large heat pumps generate heat from electricity at a low cost. Conversely, when electricity prices surge, combined heat and power plants are activated, allowing the generated electricity from heat production to be sold for profit.
Managing director Michael Teigeler noted that a spark plug change on the large engines was scheduled for mid-December. As it became apparent that stock market prices would escalate to record levels, these spark plugs could have been swiftly replaced that morning to ensure the plant’s readiness to supply electricity and capitalize on the high prices.
Christof Bauer shared insights from his experience that many industrial plants have been optimized for flexibility and responsiveness to market conditions. He expressed confusion over the continued inactivity of numerous power plants during dark doldrums.
Last year marked a record for new approvals of onshore wind turbines in Germany.
Future of Electricity Generation Looks Bright
The municipal utilities in Heidelberg have also invested in a large heat storage facility, allowing them to manage their plants in alignment with market conditions and store excess heat for days. Managing director Michael Teigeler emphasizes the potential for similar optimizations in many other cities, indicating significant economic opportunities ahead.
Overall, the data suggest that in the long run, electricity generation from renewable sources is poised to become increasingly cost-effective. The commonly referenced comparison to lower prices in nuclear-powered France is often misleading.