The December Dunkelflaute Price Spike Is a Warning About Flexibility, Not a Case Against Interconnection

On 12 December 2024 Germany ran short of wind and sun at the same time as cold weather lifted demand. In the early hours a megawatt-hour in the German day-ahead market cost about EUR 107. By the evening peak, according to data compiled by Agora Energiewende and reported by Deutsche Welle, it had risen to EUR 936. The next day prices fell back to a low of just under EUR 115. The episode, the second notable Dunkelflaute of the winter after a similar spell in early November, sent prices sharply higher in neighbouring markets coupled to Germany, including southern Norway and southern Sweden.

Norway's energy minister, Terje Aasland, was reported to be considering cutting interconnector links to Denmark, and there were calls in Norway to renegotiate connections to Germany and the United Kingdom. A Dunkelflaute, literally a dark doldrum, is a period of low wind and low solar output, typically in winter under a stable high-pressure system. In a system with a high share of wind and solar, those periods require other sources to fill the gap. When domestic supply is tight, prices rise until enough capacity, including imports, is called on to meet demand.

Because Europe's markets are coupled, flows go from lower-priced to higher-priced zones until interconnector capacity is exhausted. Mathias Mier of the ifo Institute told DW that almost one in every seven units of electricity in Europe is traded across borders. Cutting or limiting interconnectors to insulate domestic prices would mean that Nordic producers lose access to high-priced export markets, Germany loses a source of flexible supply, and everyone becomes more dependent on domestic resources during their own stress periods.

There is also a question of how the price signal is shared within Germany. The episode shows that Germany and the wider region need more flexibility for low-renewable periods. The 12 December price spike was a short, sharp signal that the European system is short of flexibility in the hours when wind and sun are both absent.