Germany investigates alleged market manipulation during Dunkelflaute power price surge

Germany Investigates Potential Market Manipulation Amid Power Price Spike

Recently, Germany experienced an unexpected surge in electricity prices during a period of low wind and solar power output. This caught the attention of the country’s grid regulator, leading to suspicions of potential market manipulation. The issue arose as backup fossil plants, essential during what is termed Dunkelflaute, were not being utilized as expected – contributing to the price upsurge.

Responding to the extreme spike in electricity prices on December 12, the Federal Network Agency (BNetzA) announced plans to investigate possible market manipulation that may have influenced the situation. The head of BNetzA, Klaus Müller, emphasized the importance of investments in capacity and flexibility to ensure power supply stability in Germany.

Market manipulation, a concern raised during events like Dunkelflaute when renewable output is low, involves withholding backup capacities to drive up electricity prices artificially. This tactic leads to sudden increases like the one where prices exceeded 900 euros per megawatt-hour (MWh). Moreover, the absence of traditional power plants played a significant role in price hikes not only in Germany but across European nations.

Despite the price spikes, the BNetzA assured that there were no threats to power supply security. However, it noted that operators failed to deploy backup plants even when prices reached 300 euros per MWh. To address these concerns, regulators and power exchange operators are stepping in to investigate whether any foul play influenced the mid-December price surge.

While everyday consumers with fixed-rate contracts may be shielded from price fluctuations, industrial users with flexible contracts remain vulnerable. The BNetzA warned that similar price surges could recur in the future. As a result, regulatory actions to build more controllable power plants in Germany are urgent.

In a similar vein, Sweden also faced a power price increase on December 12, leading to a blame game between the two countries. Swedish Energy Minister Ebba Busch pointed fingers at Germany’s energy policy, which has impacted neighboring countries like Sweden, drawing attention to interconnected energy markets within the EU.

To provide context, Germany leverages its wind power capacity to supply energy to Sweden during periods of low wind output in Germany while importing electricity from Sweden’s hydro power plants during calm days. This exchange highlights the complexity of the interconnected European power market and the importance of maintaining fair prices for all participants.

In summary, the investigations by the BNetzA and the energy market dynamics between Germany and Sweden shed light on the intricacies of managing electricity prices and security in a networked energy landscape. These events serve as a reminder of the need for transparency and collaboration to ensure fair prices and stable supply for all consumers.