Have you heard of dunkelflaute? I assume you have if you're reading my Substack. The definition from Wikipedia: In the renewable energy sector, a dunkelflaute (lit. 'dark doldrums' or 'dark wind lull') is a period of time in which little or no energy can be generated with wind and solar power, because there is neither wind nor sunlight.
Another fine article. However, picking up on a point:
“What caused these spikes ? We all know the answer, low wind and solar output”
Is this a correct formulation for the question? May I suggest the following:
What triggered the spike in prices? Answer: The anticipation by the market that there would be low wind and solar output. Thus, the MARKET caused the price spike. I’d also observe that massive profits would have been made by those companies selling probably mostly fossil-based elec into the market. This then starts to raise questions about “social welfare” – a phrase often used by proponents of markets to justify current “arrangements”. Lastly the opposite of a Dunkelflaute occurs spring through to autumn when prices collapse – illustrating, in a different way, that elec’ “markets” are wholly unsuited for more & more renewables. Sadly, no serious sign of reform is on the horizon – just “deckchair rearranging” on the sinking elec market ship.
Mike, if anything the market seems to have overestimated wind and solar output on Dec 11?
> As we can see for December 11 (green rectangle - the curves peaking at 2000 €/MWh), the continuous intraday prices were significantly higher than the already elevated day-ahead prices. (…) This suggests that the "already stretched system" was becoming even more stressed at that moment.
Very fair comment. Unasked question: how much do the generators “game” the system to get prices that make them happy? In the case of Italy, it has been shown that there is considerable “gaming” – which points to regulatory failure & raises the question: if the system cannot be effectively regulated do we have the wrong system? Germany? Monster profits by the generators 2021/2022, politicos crying tears, actual action: zero. The current elec market aims to extract the maximum in profit from Euro serfs and the regulators (I have spoken to them) are either powerless or in total denial (= market is perfect).
Another fine article. However, picking up on a point:
“What caused these spikes ? We all know the answer, low wind and solar output”
Is this a correct formulation for the question? May I suggest the following:
What triggered the spike in prices? Answer: The anticipation by the market that there would be low wind and solar output. Thus, the MARKET caused the price spike. I’d also observe that massive profits would have been made by those companies selling probably mostly fossil-based elec into the market. This then starts to raise questions about “social welfare” – a phrase often used by proponents of markets to justify current “arrangements”. Lastly the opposite of a Dunkelflaute occurs spring through to autumn when prices collapse – illustrating, in a different way, that elec’ “markets” are wholly unsuited for more & more renewables. Sadly, no serious sign of reform is on the horizon – just “deckchair rearranging” on the sinking elec market ship.
Mike, if anything the market seems to have overestimated wind and solar output on Dec 11?
> As we can see for December 11 (green rectangle - the curves peaking at 2000 €/MWh), the continuous intraday prices were significantly higher than the already elevated day-ahead prices. (…) This suggests that the "already stretched system" was becoming even more stressed at that moment.
Very fair comment. Unasked question: how much do the generators “game” the system to get prices that make them happy? In the case of Italy, it has been shown that there is considerable “gaming” – which points to regulatory failure & raises the question: if the system cannot be effectively regulated do we have the wrong system? Germany? Monster profits by the generators 2021/2022, politicos crying tears, actual action: zero. The current elec market aims to extract the maximum in profit from Euro serfs and the regulators (I have spoken to them) are either powerless or in total denial (= market is perfect).