Plentiful sunshine across Germany has lifted temperatures to 26 degrees this week, providing good conditions for solar PV generation. Combined with wind power from the northern part of the country, electricity from renewables available on the market is now prone to outstrip supply.
“The hours are now increasing in which a high feed-in of renewable energies, especially from wind energy, meets low demand for electricity and leads to negative spot prices,” said enervis analyst Tim Steinert. The consultancy expects the number of hours with negative prices to increase by 80 to 150%.
System lacks power storage
Large-scale power storage is currently not available in the German grid, so the amount of electricity fed into the system and the amount used have to be kept equal to maintain a stable frequency on the grid. When supply outstrips demand, power producer have to pay their wholesale customers to buy the excess electricity, resulting in negative power prices.
Already in March, the German wholesale power market logged about 130 hours of negative prices, mostly during periods of high wind production; that was up from 90 hours in March 2019. Some renewable power producers are not compensated for negative price periods that last more than six hours, so the increase could lead to significant revenue losses.
Spain and California worst affected
Persistently high in-feed of renewable energy supply, which is inherently intermittent, poses challenges for power grid operators especially at times of low demand due to industry lockdowns. In fact, coronavirus containment measures have slashed electricity demand in most countries by around 15%, according to the International Energy Agency (IEA)
In Spain and California, where grid operators have to balance a substantially higher share of variable renewables, the lockdown “fast forwarded these power systems 10 years into the future,” IEA executive director Fatih Birol commented.
“The abrupt slowdown in industrial and business activity across much of Europe has reduced electricity demand, but it is also depriving power systems of a key source of flexibility,” Birol explained. “Under normal circumstances, large-scale electricity consumers such as factories can adjust their usage to help balance the system,” he added, “but that option is hardly open today.”
Technical advancements allow renewables to also provide some degree of flexibility. Wind power can be gradually ramped down when demand drops late at night. Some solar power can be shut off at noon when there is more than needed. The IEA indicated that “in time, electricity generation from renewables may no longer simply follow the weather but will have to be managed in an intelligent way in order to reduce costs and improve electricity security.”