European electricity prices tumble into negative territory amid glut of green energy
European electricity prices tumble into negative territory amid glut of green energy
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How can it be negative? Does the government pay you to use electricity? Or is it just a measure and you just don't have to pay anything?
No in some cases, they pay you to use power in an attempt to keep the frequency stable. it takes time to ramp up or down power generation so the time where there's almost too much power, the rate goes negative to attempt to level it out
It's mainly happening during mid day where people aren't home and using power and when solar is at its peak
And this is why it's insane that we aren't jumping on the ability to control devices like water heaters, heat pumps, and electric cars so they use power when electricity is cheapest..
We have soooo much energy storage capacity if we're just a little smart about things.
Sounds like a good opportunity to invest into energy storage.
Basically if there is too much power going into the system it can damage transmission equipment, so they pay other grids or large users to accept some of the load. But these negative prices are usually for electricity wholesalers—prices for household consumers don’t usually change much and haven’t ever gone negative to my knowledge.
For households it depends on your contract with the energy companies. There are certain contracts which let you pay a fixed fee on top of market prices, but you'll move with hour by hour fluctuations of the market prices. This might be interesting for those with smart homes who can schedule many of the more energy intensive appliances to run when prices are at expected daily lows. Or because you generally dont use much power in the expensive moments for your region.
These contracts however also remove most of the protection you enjoy from price spikes due to technical failures in the grid, or errors in weather prediction for renewables.
Interesting thanks for the added information. So a small number of people may actually be getting paid to turn all of their lights on and mine some bitcoin or whatever.
For a couple of hours last week I was paid to use electricity. Price of eletricity goes negative fairly often, but only a little. On top of the electricity I, having a spot priced contract, pay a margin ~0.5 € cents/kWh and tax and transmission fee. Last two are about 3 cents /kWh. So for me to get paid the price has to be about -7¢/kWh and that has only ever happened during a few hours.
Okay, this was more of a read than anticipated. Turns out there are a few systems that can allow negative pricing, at least one in Australia and one in Europe. It has to do with the European electricity exchange bidding process, by which wholesale customers place bids for power usage at specific points in time, which allows power generation to be balanced for usage and stability on both production and consumption sides (without integrated storage, all the energy generated needs to go somewhere). It lets large scale consumers reschedule their consumption to take advantage of when prices are low, and lets producers spin down production when demand is low.
What happens when it turns negative is there's a sudden increase in production, usually due to solar or wind, sometimes flooding affecting hydroelectric, and the production of electricity is much higher than anticipated. Conventional power stations (especially coal) can take hours to restart after shutting down while costing significant sums of money, so it winds up being cheaper and safer for grid stability to keep less flexible power plants burning and reduce prices until wholesale customers are consuming the extra supply. Which can wind up meaning they're outright paying people to use electricity.
In addition, Germany will export electricity to their neighbours to stabilize the grid. Ironically, according to the source I found (below), consumers actually wind up paying as part of the renewable energy surcharge that seems to guarantee that renewable energy is purchased at a steady rate regardless of electricity prices. Kind of a weird system, but it incentivizes building out renewable power and maintaining grid stability. Elon may be a tool, but adding battery storage into grids to slurp up excess supply and dispense it when needed is something that is exceedingly useful in getting the most out of renewable generation.
Wholesale rates. Someone normally selling is paying. Note that most wholesale power is under a long term contract and so not subject to wholesale prices. Thus overall your power comes from guaranteed price contracts ,but your rates are a bit lower because what the contracted power costs is low.
You still need to pay for transfer and energy tax so even when the price of electricity is zero (or negative) it's still not free for the end user.
Here in Australia you get money for feeding energy back into the grid.
tried that for awhile in California then the power companies threw a fit …
Nah, that's the hole in the ozone layer giving everyone skin cancer
Negative prices mean the power companies start issuing orders to ramp down production and/or increase consumption. Residential users are generally not involved in all this because there's not much they can do to help. It's mostly between the power companies and large industrial plants that use more power in an afternoon than your home does in a year.
Someone with a coal or nuclear plant pays to keep transmitting power so they don't have to turn it off.
Some (not great) subsidy schemes for wind also pay out regardless of market prices, but those are less common.
It means the corps selling at the 'agreed upon prices' are raking it in. Read further and you'll find:
"But the negative prices signal an imbalance in the market and could discourage future investment in more energy infrastructure. Adjusting consumption patterns, such as when EV drivers charge their cars, could help smooth out prices."
Can't be letting the proles have cheap or free energy now, can we. How else are we supposed to know our place if we're not scratching in the muck desperately trying to make ends meet?
