Electricity generation in Germany is stalling. Prices on the energy exchange are exploding because solar and wind energy produce too little electricity. This is now making electricity suppliers nervous. Customers with dynamic electricity tariffs need to dress particularly warmly.
“In Germany we have been acting for years as if the question of adding secured capacity was something that could be postponed,” emphasizes the CEO. “We can already see clearly today what will happen if we switch off capacities and do not provide a fallback level for renewable energies.” His warning: “Time is running out and expansion is urgent. Not just this month.”
In addition to this week, the power grid reached its limits on four days in November. The culprit was the so-called dark doldrums, which brought the production of renewable energies almost to a standstill: there is no wind and the wind turbines, the largest electricity producers among renewable energies, are at a standstill. The fact that the sun only has some power around midday is hardly important.
Another “cold, dark doldrums” over Germany
The RWE boss's statements are now coming true: since the beginning of December, dense clouds of fog have been drifting over Germany, accompanied by almost no wind. Since important alternatives such as coal-fired power plants and nuclear energy have been dismantled, Germany has to purchase more electricity on the energy exchange. The increasing demand is driving up prices – a development that is hitting not only municipal utilities, but also middlemen and German industry hard.
According to RWE boss Krebber, the electricity price on the spot market was still at 820 euros per megawatt hour at the beginning of November. But on December 12th, the price continued to skyrocket and reached almost 936 euros. In intraday trading, according to a report in “Welt”, prices even exceeded the 1,000 euro mark. Energy traders sometimes even charged buyers over 2,500 euros for a megawatt of electricity. Normally only 40, 50 or 60 euros are due for this.
1st consequence: rolling blackouts
What does that mean specifically? Electricity production is stalling – no wonder many people are unsettled. Is Germany threatened with a blackout? Experts weigh in: A widespread power outage is considered extremely unlikely.
However, regional power outages cannot be completely ruled out. Network operators have taken precautions for such cases: instead of allowing the entire network to collapse, they temporarily switch off the electricity in certain regions in order to keep the rest of the country and especially the economy stable.
Since no region remains without power for long and the network operators spread the downtimes across different locations, experts call this approach “rolling blackouts” or “brownouts”.
2nd consequence: electricity prices are twice as high as before the pandemic
“In view of the low temperatures and low electricity generation from wind power, wholesale prices for gas reached their highest level in over 13 months at the beginning of December,” says Lundquist Neubauer from the comparison portal Verivox. The consequences are felt by customers who have had to deal with higher energy costs for years. “Electricity prices on the stock exchange are still more than twice as high as before the pandemic,” says Manuel Frondel, energy expert at the RWI-Leibniz Institute.
The new federal government must solve these problems
In the coming year, consumers will face increasing energy costs on several levels. On the one hand, the network fees for electricity are increasing, and on the other hand, the costs of gas and heating oil are increasing due to the higher CO2 tax. This affects both owners and tenants. “Network fees are likely to continue to rise. The new federal government should urgently question the massive expansion of renewables, especially photovoltaics,” warns RWI expert Frondel in the “Rheinische Post”.
Energy policy will be one of the biggest challenges for the new federal government, which will be elected on February 23, 2025. Experts agree: a climate-neutral Germany will need significantly more electricity in the future than it does today. Heat pumps, electric cars and the production of green hydrogen made with renewable energy are driving up demand.
To cover this, immense amounts of electricity from solar energy, wind power, biomass and other renewable sources are required. At the same time, the price of electricity must be reduced so that switching from fossil fuels to green electricity makes economic sense for both companies and households.
