“I am furious with the Germans. They made a decision for their country, which they have the right to make. But it had very serious consequences,” said the Swedish Minister of Defense on December 12. ‘Energy, Ebba Busch on the public channel SVT. But what has happened to the person responsible for Swedish energy policy? An anomaly. Or rather an imperfection in the European electricity market. When the wind doesn’t blow strong enough in Germany, taking a hot shower in the south of Sweden costs 167 times more than in the north!
An article published in the daily Aftonbladet summarizes the situation: on December 11, electricity prices in southern Sweden were significantly higher than those in the center. A 10-minute shower in Malmö cost more than 2.65 euros compared to 0.01 euros in Sundsvall, in the center of the country. This gap is partly explained by a poor connection between northern Sweden, where a surplus of hydroelectric power persists, and the south where higher energy demand and limited local production lead to frequent shortages.
However, for Ebba Bush, the real culprit is Germany. By prematurely exiting nuclear power, the country deprived itself of 22 GW of electrical power. Without this foundation, Germany becomes very dependent on renewable energies. Everything is fine when the wind blows enough. But when it no longer powers the wind turbines – a phenomenon known as Dunkelflaute – our neighbor is forced to run its gas and coal power plants and import electricity from nearby countries, including Sweden. This call causes the price to rise sharply on the markets on both sides of the Baltic Sea.
Last November, on wholesale markets in Germany, prices peaked at 963 euros per megawatt hour following a lack of wind. In mid-December, these same prices almost crossed the 1,000 euro mark, reaching their highest level in the last eighteen years. This sudden increase penalizes companies not covered by long-term supply contracts and consumers who have signed contracts with variable prices. Of course, the surge is temporary. In a few days, tensions on the markets disappear. Over the year, Sweden still benefits from relatively low electricity prices – between 25 and 50 euros per megawatt hour, compared to 57 euros in France and 78.5 in Germany. “But the phenomenon is still not negligible,” estimates Damien Ernst, professor at the University of Liège and Télécom Paris.
Europe stuck between two phenomena
First from a climatic point of view. Germany will delay the closure of its most CO2-emitting power plants to protect its backs. Furthermore, “the more Germany advances in its transition and installs wind turbines, the more the impact of Dunkelflauten on the markets strengthens. It’s mechanical”, explains Nicolas Leclerc, co-founder of the consultancy firm Omnegy. These unfavorable weather patterns are more frequent than we think: the European Association of Electricity and Heat Producers had already identified 160 periods of low wind production between 2010 and 2016, with each year a prolonged episode of weak winds. for ten to fourteen days.
“Europe finds itself stuck between two phenomena, analyzes Daniel Ernst. On the one hand, energy prices can increase sharply when there is no wind. But on the other, the Old Continent is experiencing also more and more periods during which these same prices are negative. This is particularly the case when renewable energies produce too much compared to demand. “This creates a difficulty, believes Daniel Ernst. In wind power, developers cannot ensure the profitability of their investment. In recent weeks, there has been a call for tenders in Denmark for wind power at sea. And no one responded,” remarks the economist.
Generally speaking, Europe must therefore face more volatility in energy prices. How to get out of this bad situation? By multiplying PPAs, these electricity delivery contracts running over several years and by developing interconnections between different countries. The problem ? PPAs do not seem to appeal much to businesses, like what is happening in France. Interconnections, however, take time and are expensive. The price of a shower in Sweden is therefore likely to remain a subject of contention.