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Electricity dealers put grid on brink of blackout

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Electricity dealers put grid on brink of blackout
Photo: DPA

Germany’s electricity grid came to the brink of blackout last week – not because of the cold, but because traders illegally manipulated the system. They tapped emergency supplies, saving money but putting the system at risk of collapse.

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The Berliner Zeitung reported on Thursday that it had obtained a letter sent by the government’s electricity regulator to the dealers responsible. It describes how since February 6, “substantial undersupply for several hours was recorded,” which raised “significant concerns” about the grid's stability.

With the system running on its emergency supply, any serious problem could have immediately led to blackouts across Germany.

Matthias Kurth, president of the regulator confirmed the letter had been sent and that an investigation had been launched. He said it had not been proven that the companies acted out of greed. “We will carefully check how it came to this unusual situation in the electricity network, and report on it,” he said.

Normal supply is maintained by the dealers acting as go-betweens for the industrial and domestic electricity consumers and the generators so that the latter know how much to supply.

The Berliner Zeitung said the dealers were legally obliged to continually order enough electricity to cover what their customers need. But this was not done earlier this month, according to the regulator’s letter.

Instead dealers sent estimates which were far too low, meaning the normal supply was almost completely exhausted. Several industry insiders told the Frankfurter Rundschau daily the tactic was deliberately adopted to maximise profits.

When central European weather is particularly cold, electricity supplies become tight, and this month has increased German exports to France. This has led to dramatic price changes, with a Megawatt hour bought wholesale costing €380 in the morning of February 7, about seven times the normal price.

In order to avoid paying such high prices, the dealers systematically reduced the amount they ordered for their customers, avoiding the expensive supply and forcing the system to open up its emergency supply – the price for which is fixed at €100 a Megawatt hour.

This is generally considered very expensive – but compared to what else was on offer at the time, it represented huge savings – yet put the entire electricity supply system on emergency footing for no reason. The demand for electricity was deliberately underestimated by several thousand Megawatt hours at a time, the Berliner Zeitung said.

The scam also had political repercussions, the paper noted, in that reserve power stations in Mannheim and Austria were therefore fired up, backing up those who said that Germany’s intended shut down of its nuclear power stations would result in electricity supply problems.

“It is not the nuclear energy shut-down that endangers supply security, rather the greed of the market,” Holger Krawinkel from the federal association of consumers centres told the Berliner Zeitung.

The Local/hc

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