Danish electricity prices have surged to their highest level in nearly four years this week, driven by a weather phenomenon known as “dunkelflaute” that has crippled renewable energy production across Europe.
The average price for electricity reached 1.8 kroner per kilowatt-hour in Western Denmark and 2 kroner in Eastern Denmark, according to data from energy company Norlys. This marks the highest weekly average since December 2022, when the wholesale price stood at 2.9 kroner per kilowatt-hour.
What is Dunkelflaute?
Dunkelflaute, a term meaning something like “dark calm,” describes periods of low wind and overcast skies that significantly reduce power generation from wind turbines and solar panels. This phenomenon is common during the winter months when several days of weak or no wind cause windmills to stand still, while clouds, fog, or low winter sun limit solar energy output.
This week’s weather conditions have been particularly challenging because the low production of wind and solar energy has affected large parts of Europe simultaneously. Normally, Denmark can import electricity from neighboring countries when they experience favorable wind conditions. However, this widespread regional shortfall has forced the country to rely more on expensive gas-fired power plants to meet demand.
“This week has shown how much the weather now affects our electricity prices. When both wind and sun fail in large parts of Europe at the same time, cheap renewable energy becomes a scarce commodity,” said Ellen Trolle, director of Norlys’ energy business, in a statement.
The Impact of Geopolitics
The increased reliance on gas has directly impacted electricity costs, as gas prices remain elevated due to ongoing geopolitical conflicts. The war in Russia and the resulting export sanctions, coupled with the conflict in Iran and disruptions to oil flows through the Strait of Hormuz, have all contributed to higher gas prices.
Despite the recent spike, the current prices are significantly lower than those seen during the 2022 energy crisis. At its peak that year, the average wholesale electricity price reached 4.35 kroner per kilowatt-hour for one week. The current tax rate is 1 øre per kilowatt-hour, compared to 72 øre last year.
“We are very far from the situation Danes experienced during the energy crisis, and the conditions are completely different,” Trolle added.
Sunday Evening Electricity Prices Reached Peak Levels
The highest prices this week occurred on Sunday evening around 7 p.m., when the pure electricity price reached 2.4 kroner per kilowatt-hour in Western Denmark and 2.6 kroner in Eastern Denmark.
When network tariffs and other charges are added, consumers west of the Great Belt can expect to pay over three kroner per kilowatt-hour between 5 p.m. and 8 p.m. For those east of the Great Belt, prices will exceed three kroner from 3 p.m. to 9 p.m.
The transition to winter tariffs by grid operators has widened the price gap between the cheapest and most expensive hours of the day. Trolle advises consumers to shift their electricity usage to off-peak hours to manage their bills. “If you can wait to run the dishwasher or charge the electric car until the cheaper hours, it’s a simple way to keep the electricity bill down a bit,” she said.
Norlys has also provided five simple tips to reduce electricity consumption:
- Use a cable instead of wireless charging when charging your phone.
- Clean the lint filter in your tumble dryer after each use and spin-dry laundry thoroughly first.
- Stream via Chromecast or Apple TV instead of using a game console.
- Set and maintain your refrigerator at 5°C and your freezer at -18°C.
- Use less water in pots and put a lid on when boiling water.
Renewable Energy Growth Could Lower Electricity Prices
Electricity prices are expected to fall when the weather provides more sun and more wind. The growing share of renewable energy in Denmark’s energy mix also has the potential to push prices down significantly when weather conditions are favorable.
However, the current situation highlights the ongoing challenges of transitioning to a green energy system and the vulnerability of electricity markets to weather and geopolitical factors. As Trolle pointed out, increasing renewable energy capacity and improving energy storage options, such as batteries, will be key to making Denmark less dependent on oil and gas in the future.
