(Jan 31): German wind output has fallen to the lowest level in four years this winter, with another bout of low wind speeds that threaten profits at renewable power operations expected over the weekend.

Wind generation in the country has averaged 18,000 megawatts (MW) so far in the season that started in October, the lowest since the winter of 2020/2021, Rabobank energy analysts said in a report. That could dent earnings for the renewable energy divisions of big utilities like RWE AG, SSE Plc and Orsted A/S, though higher power prices might help them balance that out, said Bloomberg Intelligence senior analyst Patricio Alvarez.

“Lower wind resources this year will definitely impact Orsted, RWE and SSE’s profits from offshore assets, though that could be offset by higher power price realisations this winter and capacity expansion,” he said.

Strong fluctuations in European renewable power output this winter have highlighted the need for backup from other sources and the challenge governments face in accelerating the energy transition. Increased generation from fossil fuels such as natural gas and coal have been needed to meet demand, pushing up electricity prices. 

Wind levels have been weak in most European countries, which has led to power prices above €100 (RM456.95) per megawatt-hour from Spain to the UK so far this month.

Germany is particularly prone to higher prices during these periods because the country retired a number of coal and lignite units last April. A plan to subsidise new gas-fired power stations as a backup has also been postponed due to a lack of political support after the collapse of Chancellor Olaf Scholz’s government.

And the next windless period is on its way. Wind generation in Germany is forecast to slump from around 20,000MW on Friday to about 5,000MW over the weekend. Solar output, however, is expected to total around 19,000MW at the peak during the weekend, a relatively high figure for winter.

For several periods this winter, both wind and solar generation were low in a double whammy known as Dunkelflaute.

In addition to a somewhat windless winter, since the pandemic the industry has suffered with supply chain bottlenecks, rising project costs and high interest rate.

Orstead’s chief executive officer Mads Nipper announced this morning that he was stepping down after a series of significant writedowns over the past few years.

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