(Bloomberg) -- European electricity prices jumped above €1,000 a megawatt-hour as low wind generation drove a surge in gas-fired power.
Gas-fed output in Germany, Europe’s biggest electricity market, rose to a two-year high to meet demand. With wind production forecast to be weak until the weekend, the country must rely on costlier fossil fuels to keep the lights on.
German intraday power climbed as high as €1,013.12 a megawatt-hour for 2-3 p.m. on Wednesday on Epex Spot SE. Prices also increased in the UK, where gas generation hit its highest since January 2020.
The “Dunkelflaute” phenomenon — known in power markets by the German word for periods when hardly any wind or solar is produced — poses a significant issue for energy infrastructure that relies on renewables. A similar event last month sent prices to levels last seen during Europe’s energy crisis.
Wind generation in Germany is expected be just 2,362 megawatts at 2 p.m. and edge up to 3,635 megawatts by 6pm when evening demand picks up, EEX data show. The supply gap to be filled by fossil fuels widened by 12 gigawatts from a day earlier. Oil-fired output jumped to the highest since Nov. 28.
“German wind generation is even lower than the already low forecast levels,” said Sabrina Kernbichler, lead power analyst at Energy Aspects Ltd. The country’s ability to import electricity is also constrained by “limited available intraday interconnector capacity” in those peak-demand hours.
Germany’s gas use increased to 16.8 gigawatts, the highest since December 2022, while lignite and coal-fired generation also ramped up.
In neighboring France, intraday prices rose as high as €286.37 a megawatt-hour for 5 p.m. Yet French nuclear output is running at the highest in almost a year, providing a supply buffer.
German day-ahead power advanced to €395.34 a megawatt-hour. Disregarding an IT glitch in June that caused prices to spike, that would be the highest since December 2022, according to data from Epex Spot. The UK equivalent rose to £198.72 a megawatt-hour, Epex data showed.
--With assistance from Eamon Akil Farhat.
(An earlier version of this story corrected the measurement of power demand.)
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