A new surge in electricity prices in Germany has led to the Georgsmarienhütte specialty long steel plant suspending production.
In a post on LinkedIn, managing director Anne-Marie Grossmann writes that production had to be stopped in Monday morning. The day-ahead electricity price that morning reached €432/MWh ($449). By comparison, sudden peaks before 2019 never exceeded €130/MWh, notes Grossmann. She expresses outrage at “the failure of energy policy in Germany, the land of engineers and innovators,” and how it lags behind other countries with lower energy costs.
GMH is not the first steelmaker to halt production of this in winter due to peak electricity prices. In December, the Feralpi valve plant in Rize suspended production for two days due to a sudden jump in electricity prices, exacerbating the difficult market situation. Then electricity prices on the spot exchange rose to €900/MWh.
The jumps are explained by low production of wind and solar energy after a long period of cloudy skies with weak winds. Such occasional "dark lulls" ("Dunkelflaute") are becoming symptomatic in Germany, which is trying to shift its energy supply towards renewable energy sources, mainly wind and solar power.
Grossmann therefore particularly attacked the political trend towards nuclear abolition and fossil energy generation too quickly before a stable supply from renewable sources can be counted on. According to the Berliner Zeitung, GMH had already adjusted the production rhythm of its electric arc furnace to shorter shifts at the beginning of January. The newspaper cites company sources who say the plant nevertheless retains its ability to guarantee supplies to customers.