Power prices in Europe are climbing as poor conditions for renewable energy coincide with heightened heating demand brought on by cold weather across the region. Germany and the U.K. have experienced significant price increases, with German electricity costs rising 12% to nearly $126 per megawatt-hour and U.K. prices jumping 14% to over $133 per megawatt-hour, according to Bloomberg data.
The surge is linked to a sharp drop in wind energy production throughout Western Europe. Forecasts for wind generation in the area, initially expected to range from 25-30 gigawatt-hours daily, have been revised down to below 20 gigawatt-hours for most days the week of Jan. 12.
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Germany’s wind power output is projected to fall steeply to 2,200 megawatts from a previous level of 24,000 megawatts. In the U.K., wind generation is also predicted to fall significantly, from 15,000 megawatts to just 3,600 megawatts.
The drop in wind energy production is driving increased reliance on gas-fired power plants. This trend is expected to impact carbon markets, as reduced renewable output could lead to greater use of fossil fuels, boosting demand for European Union carbon allowances.
The situation is part of a broader pattern observed this winter, with unideal wind conditions leading to periodic electricity price spikes. During low wind periods in recent months, both Germany and the U.K. reported prices exceeding $1,000 per megawatt-hour.
Tags: Climate Change, Europe, European Union, Germany, Renewable energy, United Kingdom, Weather, Wind energy, Wind farms
[Karah Rucker]
POOR CONDITIONS FOR RENEWABLE ENERGY ARE CAUSING AN INCREASE IN EUROPEAN POWER PRICES-
A SITUATION WHICH COMES AMID HEIGHTENED DEMAND FOR HEATING AS COLD WEATHER HITS THE REGION.
POWER PRICES IN GERMANY AND THE UK HAVE SEEN PARTICULARLY SIGNIFICANT JUMPS-
WITH WIND ENERGY INFRASTRUCTURE IN THE AREA PRODUCING MUCH LESS ELECTRICITY THAN INITIALLY EXPECTED.
GERMANY HAS SEEN COSTS CLIMB 12 PERCENT, REACHING NEARLY 126 DOLLARS PER MEGAWATT-HOUR-
WHILE UK PRICES SURGED NEARLY 14 PERCENT TO OVER 133 DOLLARS PER MEGAWATT-HOUR, ACCORDING TO DATA COMPILED BY BLOOMBERG.
WIND GENERATION FORECASTS FOR WESTERN EUROPE HAD BEEN EXPECTED TO BE AROUND 25 TO 30 GIGAWATT-HOURS DAILY THIS WEEK-
BUT HAVE NOW BEEN REVISED DOWNWARD TO BELOW 20 GIGAWATT-HOURS ON MOST DAYS.
THIS DECREASE IN RENEWABLE ENERGY OUTPUT COINCIDES WITH COLDER-THAN-AVERAGE TEMPERATURES FORECASTED FOR MOST OF JANUARY-
DRIVING UP HEATING DEMAND AND RELIANCE ON GAS-FIRED POWER PLANTS.
THE REDUCTION IN WIND GENERATION IS EXPECTED TO IMPACT CARBON MARKETS AS WELL-
SINCE LIMITED RENEWABLE OUTPUT COULD LEAD TO INCREASED FOSSIL FUEL-BASED GENERATION, CREATING ADDITIONAL DEMAND FOR EUROPEAN UNION CARBON ALLOWANCES.
GERMAN WIND GENERATION IS PREDICTED TO FALL AS LOW AS 2,200 MEGAWATTS, A SHARP DROP FROM 24,000 MEGAWATTS THAT IT HAD PREVIOUSLY BEEN EXPERIENCING.
UK WIND GENERATION IS ALSO PROJECTED TO DECLINE, DROPPING FROM 15,000 MEGAWATTS TO JUST 3,600 MEGAWATTS.
THIS IS PART OF A BROADER TREND OBSERVED THIS WINTER-
AS UNIDEAL WIND CONDITIONS HAVE CAUSED ELECTRIC PRICES TO SPIKE-
RESULTING IN THE UK AND GERMANY BOTH EXPERIENCING PRICES EXCEEDING 1,000 DOLLARS PER MEGAWATT-HOUR DURING LOW WIND PERIODS IN RECENT MONTHS.
FOR STRAIGHT ARROW NEWS, I’M KARAH RUCKER.
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