Lack of sun and wind leads to record electricity prices

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  Rob Koster

  economics reporter

People with a dynamic energy contract would do well to consume as little electricity as possible today. The average hourly price already reached a record high yesterday, today it is still fifty percent higher. Between five and six o’clock this afternoon, electricity costs no less than 1.2 euros per kilowatt hour.

People with a variable or permanent contract do not notice the high hourly price. They pay the rate specified in their energy contract. About four million people have a permanent contract for one or more years. More than three million people have a variable contract that is usually adjusted quarterly.

The number of households in the Netherlands with a dynamic contract increased in the past year from just under 250,000 to more than 350,000. They pay the hourly price for electricity. They receive the hourly prices for the coming day via an app. They can then take this into account when determining when they use a lot or little energy. So charging your electric car at home at five o’clock this afternoon is not such a good idea.

The main cause of the high electricity price today is the weather. “It is gray, so there is little solar energy and there is no wind, so there is hardly any wind energy,” says Martien Visser, energy expert and lecturer at Hanze University of Applied Sciences in Groningen.

But it’s not just the weather. “If there is no sun and wind, the gas-fired power stations have to run faster, and there are currently relatively many gas-fired power stations under maintenance.” Electricity from gas is more expensive than from solar and wind, and now that there are fewer gas-fired power stations available, the price is rising even further.

And then there is also an international component, says Visser: “Germany has closed many nuclear power stations and tries to burn as little brown coal as possible. That is why a lot of electricity flows from the Netherlands across the border to Germany.” The electricity price in Germany is even higher today than in the Netherlands.

Electricity production will become increasingly dependent on sun and wind in the coming years. Energy companies see that this puts pressure on the revenue model of gas-fired power stations. The owner of a large gas power plant in Rotterdam is therefore threatening to close the Rijnmond 1 power plant.

Because gas-fired power stations will no longer be profitable in the long term, but we do need them every now and then, a so-called capacity market is being considered. Energy companies then receive compensation for leaving their gas power plant on standby. As soon as there is a shortage of sun and wind, gas-fired power stations can be switched on to compensate for the shortage of electricity from sun and wind.

After ten o’clock tonight, the electricity price will drop back to a normal level of around thirty cents per kilowatt hour. But the unpredictability of the amount of sun and wind will not lead to a peak in the price of electricity for the last time.

By the way, we don’t have to feel sorry for people who have a dynamic contract. Last summer, the electricity price around noon was often negative. At those times they actually paid much less than people with a permanent or variable contract.