Dubai Telegraph - Renewables overproduction turns electricity prices negative

EUR -
AED 3.826681
AFN 70.961758
ALL 98.138602
AMD 405.652886
ANG 1.877182
AOA 951.190259
ARS 1045.720247
AUD 1.602814
AWG 1.877897
AZN 1.775245
BAM 1.955573
BBD 2.102956
BDT 124.465544
BGN 1.955294
BHD 0.392554
BIF 3076.642669
BMD 1.041829
BND 1.403837
BOB 7.197164
BRL 6.043693
BSD 1.041579
BTN 87.914489
BWP 14.229347
BYN 3.408604
BYR 20419.848375
BZD 2.099456
CAD 1.456529
CDF 2991.091432
CHF 0.930957
CLF 0.036923
CLP 1018.83097
CNY 7.54601
CNH 7.562783
COP 4573.368835
CRC 530.538382
CUC 1.041829
CUP 27.608468
CVE 110.252195
CZK 25.343745
DJF 185.478458
DKK 7.457729
DOP 62.772709
DZD 139.835759
EGP 51.726992
ERN 15.627435
ETB 127.508391
FJD 2.371151
FKP 0.822333
GBP 0.831435
GEL 2.855018
GGP 0.822333
GHS 16.456089
GIP 0.822333
GMD 73.970229
GNF 8977.957272
GTQ 8.040066
GYD 217.904692
HKD 8.110066
HNL 26.320943
HRK 7.431636
HTG 136.72412
HUF 411.522823
IDR 16610.452733
ILS 3.856892
IMP 0.822333
INR 87.968134
IQD 1364.44153
IRR 43834.955489
ISK 145.523076
JEP 0.822333
JMD 165.930728
JOD 0.738765
JPY 161.244275
KES 134.884334
KGS 90.122166
KHR 4193.512952
KMF 492.268155
KPW 937.645704
KRW 1463.259646
KWD 0.320727
KYD 0.867999
KZT 520.059599
LAK 22878.342838
LBP 93271.167197
LKR 303.144792
LRD 187.998165
LSL 18.795317
LTL 3.076251
LVL 0.630192
LYD 5.086409
MAD 10.478083
MDL 18.997794
MGA 4861.435378
MKD 61.522855
MMK 3383.819949
MNT 3540.134882
MOP 8.35093
MRU 41.443187
MUR 48.810083
MVR 16.10707
MWK 1806.090235
MXN 21.283008
MYR 4.654932
MZN 66.583684
NAD 18.795317
NGN 1767.675143
NIO 38.325549
NOK 11.53576
NPR 140.663663
NZD 1.785942
OMR 0.400943
PAB 1.041579
PEN 3.949541
PGK 4.193513
PHP 61.404399
PKR 289.239507
PLN 4.337676
PYG 8131.055634
QAR 3.798559
RON 4.978071
RSD 116.991412
RUB 108.671879
RWF 1421.834864
SAR 3.911473
SBD 8.734231
SCR 14.272055
SDG 626.663972
SEK 11.497837
SGD 1.402931
SHP 0.822333
SLE 23.68116
SLL 21846.638123
SOS 595.230868
SRD 36.978718
STD 21563.75683
SVC 9.113941
SYP 2617.626467
SZL 18.788818
THB 35.922648
TJS 11.092512
TMT 3.646401
TND 3.309016
TOP 2.440072
TRY 35.9978
TTD 7.074178
TWD 33.946439
TZS 2770.578216
UAH 43.089995
UGX 3848.553017
USD 1.041829
UYU 44.294855
UZS 13362.448044
VES 48.506662
VND 26482.251319
VUV 123.688032
WST 2.90836
XAF 655.880824
XAG 0.033274
XAU 0.000384
XCD 2.815595
XDR 0.792308
XOF 655.880824
XPF 119.331742
YER 260.379151
ZAR 18.915093
ZMK 9377.71492
ZMW 28.772658
ZWL 335.468513
  • SCS

    0.2300

    13.27

    +1.73%

  • RBGPF

    59.2400

    59.24

    +100%

  • GSK

    0.2600

    33.96

    +0.77%

  • AZN

    1.3700

    65.63

    +2.09%

  • CMSC

    0.0320

    24.672

    +0.13%

  • RIO

    -0.2200

    62.35

    -0.35%

  • NGG

    1.0296

    63.11

    +1.63%

  • BTI

    0.4000

    37.38

    +1.07%

  • BCC

    3.4200

    143.78

    +2.38%

  • BCE

    0.0900

    26.77

    +0.34%

  • RELX

    0.9900

    46.75

    +2.12%

  • RYCEF

    -0.0100

    6.79

    -0.15%

  • BP

    0.2000

    29.72

    +0.67%

  • CMSD

    0.0150

    24.46

    +0.06%

  • JRI

    -0.0200

    13.21

    -0.15%

  • VOD

    0.1323

    8.73

    +1.52%

Renewables overproduction turns electricity prices negative
Renewables overproduction turns electricity prices negative / Photo: Ina FASSBENDER - AFP/File

Renewables overproduction turns electricity prices negative

With the proliferation of solar panels and wind turbines an unusual phenomenon is becoming more and more frequent: wholesale electricity prices turn negative.

Text size:

While that may brighten the mood of consumers whose power bills have surged in recent years, it could undermine the further development of renewables, a key element in the fight against global warming.

The increasingly frequent phenomenon is "extremely problematic" for the wind and solar sector, said Mattias Vandenbulcke, strategy director of the renewables industry group France Renouvelables.

"It allows some to have harmful, even dangerous rhetoric which says 'renewables are useless'," Vandenbulcke said.

In southern Australia, wholesale electricity prices have been negative some 20 percent of the time since last year, according to the International Energy Agency.

The share of negatively priced hours in southern California was above 20 percent in the first half of the year, more than triple from the same period in 2023, the IEA said.

In the first six months of the year in France, there were negative prices around five percent of the time, beating the record set last year, according to the electricity grid operator RTE.

In Switzerland the price tumbled as far as -400 euros (-$436) per megawatt hour on July 14. The lowest prices are usually recorded around midday during the summer when solar production is at its peak.

- 'A warning signal' -

The trend has been accelerating for the past three years as demand in Europe has unexpectedly dropped since the Covid pandemic and the war in Ukraine.

Prices turn negative on the spot wholesale electricity market when production is strong while demand is weak.

Around a fifth of the total is traded on this market, where electricity is bought for the following day.

Negative prices help reduce the bills of consumers, said Rebecca Aron, head of electricity markets at French renewables firm Valorem, but the impact is delayed and difficult to discern among the other factors that send prices higher and lower.

Large, industrial consumers that can shift production to times when prices are negative and buy on wholesale markets can reap the biggest rewards.

Negative prices are "a warning signal that there is way too much production on the electrical grid", said energy analyst Nicolas Goldberg at Colombus Consulting.

Electricity grids need to be kept constantly in balance. Too much can lead to the electricity to increase in frequency beyond norms for some equipment. Too little can lead to some or all customers losing power.

There are currently few options to stock surplus electricity production so producers have to reduce output.

Many renewable producers stop their output when prices are set to turn negative. It takes one minute to stop output at a solar park, two to three minutes for a wind turbine.

But not all stop their production.

- Tripling renewables -

"Renewable energy can be controlled, but depending on production contracts, there might not necessarily be an incentive to stop," said Mathieu Pierzo at French grid operator RTE, which has the responsibility for balancing the electricity load.

Some producers are paid a fixed price under their contract or are compensated by the state if prices fall below a certain level.

Fossil fuel and nuclear power plants can adjust their production to some extent, but halting and restarting output is costly.

In the future, solar and wind will also have to "participate more in balancing the electricity system", Pierzo said.

Solar and wind production is set to rise further as nations agreed at the COP28 climate conference last year to triple renewable energy capacity by 2030 as part of efforts to limit warming to 1.5 degrees Celsius compared with pre-industrial levels.

"Rising frequency of negative prices sends an urgent signal that greater flexibility of supply and demand is needed," the Paris-based IEA warned last week.

"The appropriate regulatory frameworks and market designs will be important to allow for an uptake in flexibility solutions such as demand response and storage," it said.

F.A.Dsouza--DT