BUILD MOREīoth the European Commission and International Energy Agency (IEA) said recent record energy prices should not slow the effort to meet climate targets under the Paris agreement by moving away from fossil fuels. Better matching supply and demand can help maintain grid stability.Įurope currently invests 40 billion euros a year on power grids, according to lobby group WindEurope which estimates that annual investments need to double over the next thirty years to 66-80 billion euros a year. Several countries are also seeking to reward flexible consumer behaviour such as industrial customers curbing demand at certain hours. Utilities across Europe are starting to invest in storage systems including large batteries or smart charging solutions for electric cars. I think we are only at the beginning of the development of that kind of business model.” First, “the market will be more volatile going forward and that the market needs to adapt to that,” she told Reuters.Īlso, “there is an evident need and also a value in flexibility services and storage. Weaker wind periods, which are not uncommon, cause prices to rise and more thermal plants are needed.Īnna Borg, chief executive of Swedish utility Vattenfall sees two lessons. This makes wholesale electricity prices lower at times of high wind, leading to lower consumer bills. Wind power generation has low operating costs, offering cheaper wholesale power than thermal plants that must pay for fuel, along with costs associated with carbon emissions. In Germany, Europe’s largest economy with the continent’s highest wind power capacity, combined output from both on and offshore wind farms fell around 16% this year-to-date, Bruno Burger, an analyst at Germany’s Fraunhofer Institute, told Reuters. Some heavy industry had to cut supplies and some power suppliers went out of business.Įurope’s largest wind producers Britain, Germany and Denmark harnessed just 14% of installed capacity, in the third quarter, when gas prices hit record highs, compared with an average of 20-26% seen in previous years, according to Refinitiv data. The worldwide spike in gas prices drove up energy bills for businesses and consumers. Less wind power increased demand at thermal power plants, but tight natural gas supplies raised their costs. “If we had high winds or just reasonable winds over that period, we wouldn’t have seen these price spikes,” said Rory McCarthy, principal analyst at Wood Mackenzie. ![]() ![]() The situation illustrated a challenge facing the European Union as it tries to boost renewable power and meet its climate targets: Power prices can soar when the wind dies down, so generators need ways to store some of the excess power when winds are strong. “I also suspect that any big moves ahead of the run ups to Christmas have as much to do with the thinness of the market and traders needing to close short positions ahead of shutting down for the holidays as anything else.OSLO/COPENHAGEN, Dec 22 (Reuters) - Wind speeds were milder than usual in Europe this year, so windmills across the bloc generated less electricity which worsened a crunch that sent power prices to record highs as utilities had to buy more coal and scarce, costly, natural gas. “The strength in the French market has been the main engine - aside from gas prices - of strength in neighboring markets, including Germany, in recent days,” said Glenn Rickson, head of European power analysis at S&P Global Platts. There was also speculation some traders may be closing short positions due to rising capital requirements from exchanges. ![]() Prices gained amid thin holiday trading even as gas declines. German power for next year jumped to a high of 335 euros a megawatt-hour, extending a 25 per cent rally on Tuesday. ![]() But electricity will be expensive, there’s going to be a cost to pay.” “This is the domino effect we need to fear. “If we have a very, very cold day, it could be problematic, especially if we have to import and our neighbors have problems as well,” said Paris-based Anne-Sophie Corbeau, a research scholar at the Center on Global Energy Policy at Columbia University. This advertisement has not loaded yet, but your article continues below.
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