Germany Set For Wind Lull This Week With Low Holiday Demand

(Bloomberg) -- Germany’s wind generation is forecast to plunge this week but the price effect will likely be damped by lower-than-usual demand during the holiday period.

On Dec. 27, power generation is set to slump to 1.8 gigawatts, only 10% of the average this winter so far. Temperatures are forecast above the 30-year normal and have been revised up on Dec. 27, compared to previous expectations.

The “Dunkelflaute” phenomenon — known in power markets by the German word for periods when very little or no solar or wind energy can be produced — can create a problem for nations as they charge on with their transition. Germany has spent hundreds of billions of euros to bring online more renewable sources of power than any other country in Europe, but is seeing huge price spikes when these renewables are not generating. 

Until large scale energy storage is a reality, these spikes are expected to continue. The other option is relying on backup generation which for Germany can often mean firing up legacy oil and gas plants, which are expensive to run and drive up power prices.

Relying on gas from reserves to keep the lights on is a risky choice for Europe. A key transit deal for Russian gas is expiring at the end of the year, the EU is bracing for fresh challenges to refilling its storage tanks next year.

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