Power prices go negative in Germany due to an excess of renewable energy sources

Germany has invested an estimated 200 billion Euros over the past two decades to promote the production of cleaner electricity, with over a third of the country’s energy production coming from renewable sources in 2016. While this may sound like a good thing, it does introduce problems for the electricity market, issues that have to be resolved to make energy grids based on renewable energy sources more viable.  

This Sunday, energy prices became negative in Germany, with unseasonably warm weather and an abundance of wind power causing an oversupply of electricity. Having too much electrical power is not a good thing, as it disrupts the balance of the power grid and can even cause appliances to break or damage the network to cause power outages. The electricity that is delivered to the grid needs to go somewhere, which means that in an oversupply situation users can be paid to utilise the grid’s excess energy. 

Energy prices go negative to encourage consumers to consume more electricity and force energy suppliers to invest in more flexible infrastructure. Nuclear and coal power plants cannot be simply turned off, with both requiring lengthy and costly startup times and run down times, making it easier and cheaper to provide electricity at a loss. The potential for negative electricity prices makes the investment in energy storage systems more economical for suppliers, allowing Germany’s power grid to more naturally adapt to the changing market. 

In Germany prices have gone negative over 100 times in 2017, showcasing the need for power storage solutions within a nation’s power grid when using renewable energy sources. There are several solutions to this problem, be it the use of energy storage solutions like a large battery bank or a pumped hydro station, where water is pumped into an uphill reservoir when electricity is oversupplied to later run downhill through generators to offer cheap power when required. Another alternative is to create a system where consumers are notified when electricity is cheap and plentiful to encourage citizens to use their washing machines and other appliances to alleviate the issue.   

Germany has invested an estimated 200 billion Euros over the past two decades to promote the production of cleaner electricity, with over a third of the country’s energy production coming from renewable sources in 2016. While this may sound like a good thing, it does introduce problems for the electricity market, issues that have to be resolved to make energy grids based on renewable energy sources more viable.  

This Sunday, energy prices became negative in Germany, with unseasonably warm weather and an abundance of wind power causing an oversupply of electricity. Having too much electrical power is not a good thing, as it disrupts the balance of the power grid and can even cause appliances to break or damage the network to cause power outages. The electricity that is delivered to the grid needs to go somewhere, which means that in an oversupply situation users can be paid to utilise the grid’s excess energy. 

Energy prices go negative to encourage consumers to consume more electricity and force energy suppliers to invest in more flexible infrastructure. Nuclear and coal power plants cannot be simply turned off, with both requiring lengthy and costly startup times and run down times, making it easier and cheaper to provide electricity at a loss. The potential for negative electricity prices makes the investment in energy storage systems more economical for suppliers, allowing Germany’s power grid to more naturally adapt to the changing market. 

In Germany prices have gone negative over 100 times in 2017, showcasing the need for power storage solutions within a nation’s power grid when using renewable energy sources. There are several solutions to this problem, be it the use of energy storage solutions like a large battery bank or a pumped hydro station, where water is pumped into an uphill reservoir when electricity is oversupplied to later run downhill through generators to offer cheap power when required. Another alternative is to create a system where consumers are notified when electricity is cheap and plentiful to encourage citizens to use their washing machines and other appliances to alleviate the issue.