How the solar eclipse affects the power markets

To Danske Commodities, the solar eclipse on March 20th 2015 is more than just an interesting natural phenomenon. When the moon blocks out the sunlight, it affects the power markets in all of Europe. Here, three of Danske Commodities’ specialists explain how:

What is a solar eclipse?

Kim Bentzen, one of Danske Commodities’ in-house meteorologists: “A solar eclipse is a type of eclipse that occurs when the Moon passes between the Sun and Earth, and the Moon fully or partially blocks the Sun. On Friday, 86% of the sun will be blocked here in Denmark and in Germany. For the ordinary person it will feel like a cloud blocking the sun. It won’t be too dramatic. In Denmark, we won’t get full effect of the eclipse, because Friday is going to be cloudy.

How does the solar eclipse affect the power production?

Jakob Bendixen from our Asset Management team: “If you look at all of Europe, the effect will be just like shutting down 80 of the biggest power plants at the same time. Denmark has 500 MW of solar power cells installed, so if it was on a cloudless day, the solar eclipse will be like shutting down a reactor at the Studstrup power plant. The interesting thing is, that the solar eclipse is 100% predictable, and we have known for 100+ years when it would come, but the human reaction to the eclipse is unpredictable."

How will the solar eclipse affect the markets?

Lars Kristensen, Head of Intraday Analysis: “In a number of ways: You would think that power consumption would go up, because the need for artificial light increases, but on the other hand it could affect consumption negatively, if people stop their normal activities to observe the eclipse. Power plants will ramp up to compensate for the decline in solar energy in the grid and ramp down again, when the solar eclipse is over. Another factor that we need to take into consideration is hysteria. A lot of the information that the market gets, it gets from media who are doing what they can to make the solar eclipse as exciting as possible and give the impression that this is more dramatic than it really is. That can cause a reaction of panic that can influence the prices.”

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