German power prices dropped below zero on the first trading day of the year, an increasingly frequent phenomenon in Europe as renewables expand.

German power prices dropped below zero on the first trading day of the year, an increasingly frequent phenomenon in Europe as renewables expand.

Intraday prices in Germany, the region’s biggest market, turned negative during four hours overnight as wind-energy output reached as much as 40 gigawatts, far outstripping demand."

  • wewbullEnglish
    2·
    2 days ago

    We never have been 100% renewable in the UK. It’s more that we go into surplus and shutting generators down is more expensive than the price going negative. Hence we won’t get huge negative prices. Connectors to other countries can only export so much.

    It also only happens when:

    • long term weather forecast underestimated weather based generation.
    • demand is low. (E.g. weekend and public holidays)

    The population of Germany is only 25% bigger than the UK, so I think the two are comparable. A larger manufacturing base will make the demand-side curve more predictable though. Still, we’re largely talking about the effect of supply unpredictability.