Low wind speeds and a surge in energy prices: what's the outlook for autumn 2021?

Low wind speeds and a surge in energy prices: what's the outlook for autumn 2021?

The lack of wind over the summer months across Europe has brought significant impacts to the amount of energy generated by renewables, contributing to a surge in energy prices. The wholesale cost of energy has led to a number of energy suppliers in the UK going bust and the price of energy has already reached record levels throughout Europe. All before we encounter colder temperatures, creating price anxiety as we move towards winter.

Whilst a number of factors have brought about the surge in wholesale energy costs, the lack of wind has been a key contributing factor for the surge in electricity prices. Meteomatics has analysed its database (weather forecasts and Meteomatics Energy Models) which shows that there has been a significant drop in wind power generated and the long-range forecast shows that the lack of wind could continue.

The chart below for wind power production for an offshore wind farm close to London provides an example of the low levels of production throughout September until 28th.

Chart 1: showing generated power with the turbine vestas v90 with an installed capacity of 2000kW and a hub height of 110 metres.

Chart 1: showing generated power with the turbine vestas v90 with an installed capacity of 2000kW and a hub height of 110 metres.

The lack of wind over the summer has had a profound impact on the energy supply as countries look to grow their economies and recover from the pandemic. UK Energy giant SSE said, “its renewable assets produced 32% less power than expected between April 1st and September 22nd thanks to historically dry and low-wind conditions. This equates to 11% of its full-year output target”. 

The UK generated 25% of its energy from wind power on average in 2020, whereas it now makes up for around 7%, resulting in the UK moving to more costly and carbon-intensive methods, including coal with the national grid firing up coal power plants (which is now providing >2%UK energy).  

Energy producers across mainland Europe have also reported similar impacts from low wind speeds and less sunshine, with German-based RWE & Danish Energy Firm Orstead both reporting that the calm weather has adversely affected their businesses. Europe is estimated to generate 20% of its power from wind and solar. 

As a result of rising demand and less power generated by renewables, wholesale energy prices have risen dramatically since early September and there appears to be no rest-bite on the horizon, with prices reaching a new high (2021) on Wednesday 6th October at €323.25 (peak load).

Market Data - EPX SPOT, Thursday 7th October @ 12:00 CET

Market Data - EPX SPOT, Thursday 7th October @ 12:00 CET

Will the recent windy weather continue and help increase renewables production?

In Early September the entire northern hemisphere experienced a very dynamic weather pattern, with a disrupted jet stream generating deep wavy patterns that caused cold outbreaks (e.g. Alaska / northern Canada) or above normal temperatures in central Europe last weekend, with southern flows prior to the arrival of a low-pressure system, now in Eastern Europe/Western Russia.

Chart 3: 05/10/2021 12 UTC: top chart: temperature and geopotential height @ 700 hPa | bottom chart:wind speed and geopotential height @ 500 hPa

Chart 3: 05/10/2021 12 UTC: top chart: temperature and geopotential height @ 700 hPa | bottom chart:wind speed and geopotential height @ 500 hPa

This week a large low-pressure system arrived from the Atlantic and impacted the UK, bringing heavy rainfall and high wind speeds, with the irregularity of the jet stream bringing the increased occurrence of low-pressure systems moving into Europe.

The chart below shows the wind speed @ 100 m together with mean sea level pressure

Chart 4: wind speed @ 100 m together with mean sea level pressure

Chart 4: wind speed @ 100 m together with mean sea level pressure

However, the irregular weather is expected to end on 7th October when high pressure is expected to build and wind speeds are expected to decrease.

How will weather in the months ahead impact renewable energy generation and demand?

Wind speeds are expected to decrease following the arrival of high pressure this week, whilst the outlook for the rest of October is uncertain. We do expect a general decline in wind speeds before a slow increase towards the end of October (as shown below), which should improve the amount of wind energy production.

Chart 5: Wind speed at 100 meters, the ensemble mean and the 90th & 10th percentiles for an offshore wind farm near London

Chart 5: Wind speed at 100 meters, the ensemble mean and the 90th & 10th percentiles for an offshore wind farm near London

The temperature is a key consideration for predicting energy demand and prices. The forecast for the month of October shows a general decline in temperature and is likely to lead to greater demand as consumers heat homes and buildings. There remains a high uncertainty regarding the temperatures we can expect across Europe.

Chart 6: Meteomatics forecast for 2-meter temperature for London, the ensemble mean, and the 90th / 10th percentiles

Chart 6: Meteomatics forecast for 2-meter temperature for London, the ensemble mean, and the 90th / 10th percentiles

Chart 7: Meteomatics forecast for 2-meter temperature for Munich and the 90th / 10th percentiles.

Chart 7: Meteomatics forecast for 2-meter temperature for Munich and the 90th / 10th percentiles.

Further ahead, the seasonal forecast is signalling a drop in temperatures as we continue through autumn and into winter, as the seasonal temperature forecast for Berlin (2 meters) shows a decline in temperature, accelerating in November with increasing uncertainty in December but signals for sub-zero temperatures in the ensemble mean late December.

Chart 8: Meteomatics forecast for 2-meter temperature for Berlin and the 90th / 10th percentiles (11/10 - 28/12).

Chart 8: Meteomatics forecast for 2-meter temperature for Berlin and the 90th / 10th percentiles (11/10 - 28/12).

Meteomatics’ API makes data accessible across all forecast timescales to help our clients access weather insights, such as the forecasted temperature with a cold winter likely to exacerbate the energy price crisis. Forecast certainty will increase throughout October and beyond, hence we will continue to monitor the weather and provide data insights to understand how they are or will continue to influence energy consumption and generation.

Please contact [email protected] if you would like to discuss Meteomatics’ API in more detail or request a no-obligation trial to experience the detail and accuracy of Meteomatics weather forecasts.