Kinetic 1D simulations reveal that a weak density depression in a current-carrying plasma can lead to the formation of a strong potential ramp (double layer). The ramp and plasma turbulence it creates share many features with recent particle and field measurements in the auroral ionosphere. An electron beam accelerated by the ramp produces a series of propagating electron phase-space holes via a spatial two-stream instability. Electron heating associated with the formation and merging of these holes is found to influence the subsequent evolution of the potential ramp.