On Sunday 8th May Germany hit a new high for electricity generation from renewables, with renewable plants supplying 87% of the demand. The result was several hours of negative electricity prices – to such an extent that commercial electricity consumers operating through the wholesale market were paid to consume electricity. This has been reported by articles in Quartz and The Independent.
As I reported in an earlier blog post, negative electricity prices are generally a reflection of insufficient flexibility in the power network. In the case of Germany on the 8th of May 2016, negative prices occurred due to a combination of high wind and solar production, and low energy consumption (due to it being a Sunday). Accordingly, there was significantly more electrical supply than demand and the electricity prices were negative from 7am – 5pm. It is interesting to note from the Figure (taken from the Quartz post) that there doesn’t seem to be a huge difference between the conventional production on Saturday compared to that on Sunday, but this small increase in the ratio of renewable to conventional power resulted in a hugely negative price spike. Additionally we also see that on both days the production was higher than consumption – I assume that this is a reflection of German exports to other electricity markets. It only seems likely that as Germany strives for 100% renewable electricity this type of situation will occur more and more frequently and will make the situation for storage more favourable. It would be ironic if the low daytime electricity prices that have eroded the market for energy storage in Germany could become so low that they actually began to favour storage again.
Also, for interest, an article I wrote about negative electricity prices and energy storage.