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Negative European energy prices hit record level – Rapid rollout of solar and wind generation has outpaced ability to store power
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Can somebody who's more knowledgeable explain to me why things like solar making electricity stupidly cheap is a bad thing?
The only thing I ever gather from these types of articles is that electric companies end up having to pay out.
I don't really get why the electric companies have to pay people money. If they're not using your power, you're not charging them. But it's not like homeowners are sending electric companies a bill?
Would a local government really let a power company go out of business because of solar? I mean they're the guys that make electricity, can't really let them fold like any other company.
The problem with electricity is that it's not like water, something you can simply store. In some ways it's more like tension in a wire of machinery than something that really flows. So simply storing power isn't easy.
But also, there are in some parts of Europe (really, really depends on which European country you're talking about) there are also issues with grid capacity. That is, how much energy can be transferred. Demand for electrical power has increased both in household and in industry. Especially as some countries (like NL) have been trying to various degree to go from gas to electrical-based heating.
It's also a bit more complicated than electric companies having to pay out. In some cases, our electric grid isn't really designed to give energy back. Household batteries for solar panels are interesting for this, but not quite popular here yet.
I've also heard of an alternative pricing: rather than negative prices when you overproduce, you simply don't pay for any electricity used until it has surpassed the 'surplus' you've provided. I don't know which country has that policy though.
It's sometimes called 'net metering,' and its what I have in the USA (NJ). If I'm using more than I'm generating, meter rolls forward. If I'm generating more, meter rolls backward. If meter is negative, it serves as raw kwh credit on the bill.
If I have a net surplus after a year, I get paid a pittance, but turns out winter is really good at burning out that surplus (which is why the 'solar year' starts in March).
I'm on my first full calendar year with solar (it went in last May/June). My surplus managed to survive until January. I was all proud. February got back to a bill rather than surplus.
I'm sitting here with hope I might make it to March with a surplus this year (considering I was generating from January - May, unlike last year) ... but the math is looking super touch-and-go.
Moving all my heating/cooling/hot water off of fossil fuel and onto electricity makes it a bit more challenging to maintain the surplus (especially with an EV in the garage ... better not go to the office too many days!) - but it's such a fun problem to have.
Of course, if my partner gets a second EV ... we'll definitely not have a surplus when March rolls around the average year.
I guess it's time for panels in the yard! :D
But why do we need to store it? It sounds like more than enough is being produced. Isn't that the whole issue? If there was a bunch stored in batteries, wouldn't that exacerbate the problem?
This is a pretty niche issue that doesnt seem intuitive at first. The grid is a big resonator network, of sorts. Power plants energize or charge up the grid with energy, and loads tap into that energy and siphon some of it off.
What this means is that there is a sort of invisible balance of energy on the grid at all times, which is reflected by the grid frequency. When there is a net surplus or deficit of power, that shows up on the grid as a gradual increase or decrease of the frequency of voltage. In the US there is nominally 60 Hz power, 50 in Europe I believe. But rather than being exactly 60(or 50), the line rate will vary between 59.5 and 60.5 Hz. More energy coming in that going out causes this to creep up, and vice versa.
Having batteries charging off of the grid is pulling energy off the grid to store it, so that helps bring the frequency down. Similarly, when batteries are discharging, that puts energy back on the grid, which can help pull it up when needed.
Electronics are designed to operate within a specific frequency range, so if the frequency drifts too far away from the nominal value then it could cause problems elsewhere. So the grid is equipped with safety precautions to quickly shut off sections of the grid if the frequency ever goes past a certain threshold. Thats why its important to maintain that power balance by controlling how much energy gets put on the grid, even if there is more available than needed.
I didn't think I'd understand the most technical response I was given, but as somebody who works with high voltage electricity, this answer made the most sense to me.
To add a bit of interesting detail I read somewhere, much of the grid is powered by turbines that are connected to AC generators. They are spinning like giant flywheels. When the grid frequency changes due to a mismatch in power, they are literally spinning a little faster or slower. They have inertia which tends to keep the frequency from changing too quickly. Solar power is DC, connected via an inverter, and doesn’t have that. There are alternative ways of providing “virtual inertia” with high-speed electronics that will be needed more as grids use more solar power.
You are correct. There are practical reasons why we have an AC grid instead of a DC grid:
AC frequency varies with load (as @grayscail said), and the grid operator is responsible for managing the grid frequency by adjusting the power inputs.
Imagine tying a rope to something and waving the free end up and down. The frequency is the number of times you move the rope up and down per second (Hertz, the unit of frequency, is just cycles per second) Depending on the rope, you will find a frequency where you get a stable, standing wave at a fixed frequency. This is what the grid operators want.
Now untie the other end and have a friend also wave it up and down, and try to recreate that wave. Pretty tricky. Now get a bunch of people in a circle with ropes tied together in the center, and you start to see the scale of the problem. By the way, lots of those people are "loads" that do whatever they want, so you have to have a couple of big strong people who you coordinate to keep everything in sync.
Fun fact, in the pre-internet days, the main way we kept our clocks in sync was to count the AC waves on the power grid. So the operator was not only responsible for producing a stable frequency but for correcting the net frequency error in the grid. There would be two clocks in the control room, one run off an independent stable frequency source and one run off the grid, and the operators would adjust the grid frequency not only for stability but to make sure the two clocks hit midnight at the same time.
The national power grids never shut down and have been running continuously for decades. Getting equipment on and off an already stable grid is much easier than starting the grid up. Most of the breakers in the power grid are there to protect the grid.
Even in a widespread outage, the overall grid remains up, and you can bring that area back online, in sync, once the fault is repaired.
This report on the 2021 winter blackout in Texas has a section that fascinates me about how close they came to losing grid stability.
Well, search online for the concept of "peaker" power plants. They're traditionally fossil fuels like gas. You can fire them up when you need additional power and your current base load isn't covering demand.
Think about it this way, demand changes throughout the day and throughout the seasons. Perhaps everyone in a state fired up their air conditioners from noon - 4pm. All the sudden you need a lot more demand. Similarly, sometimes the sun doesn't shine or the wind doesn't blow. Either reduced production of electricity or increased demand of electricity can overwhelm whatever your base load is.
Even if you generate 50% more electricity than you need during perfect renewable generation, there will always be perfect storms where renewable isn't generating perfectly and you have increased demands.
For these reasons ... we're entering into a new phase of grid generation where we don't want to burn fossil fuels as peakers. Instead, we want to release stored electricity (whether it's letting water run downhill and run a turbine or expending power from a battery).
I'm not an expert on this so I could explain it wrong, but I think what they might be missing when I see questions like that is, why is it a problem when you produce more electricity than is used, and my understanding is the answer is that either your voltage increases or your frequency increases or something like that. I'm more than willing for someone to provide a more accurate technical answer, but my understanding is basically the system works that your devices that are powered by electricity are designed to work within a certain set of parameters for that electricity, and those parameters are controlled in part by the supply of electricity matching the demand.
Power companies control for this as you explained by having different power plants and methods for producing power, so they can shift their production based on demand, but current implementations of residential or commercial solar hooked into the grid perhaps don't allow for this type of control. So if during some point in the day so you have so much solar production that the utility company doesn't control like they do their own power production plants, then they are in a situation where the grid has more supply than demand and they cannot reduce the supply directly like they could if it were from their own power plants.
I think that is the purpose of negative prices, to drive out excess supply as that may be their main method of control. Obviously that's not an instant reaction so I don't know how grid operators handle excess supply other than maybe they have some way to draw out the excess supply on the grid to bring parameters back into the desired ranges.
I see it as a water pipe under pressure. All devices are made to work under a certain amount of pressure. Excess use, the pressure drops too low, excess production too high and the pressure goes too high. This also means that if you open the tap (draw electricity), somewhere you need to add water back (produce electricity) in that instant. In the past, excess use was less of a problem, because turbines have inertia: they weigh a lot, so if the voltage went to low, the turbine would slow down a bit. See this as a water source with a huge tank buffer that supplies water to the system. If the pressure goes down, the tank just drains more quickly than water is coming in for just a moment.
The problem with wind and solar is that you can't control when they produce electricity. See it as a river flowing straight into the pipes: sometimes there's more water, sometimes less. The balance still needs to be maintained though, so if there is too much water flowing in, there is a really big need to get rid of it. Getting rid of excess energy is called "curtailment" and curtailing renewables means turning off solar and wind sources. This is why you can sometimes see wind turbines stand still when the wind is blowing hard (or they might have maintainance done on them). Coal, gas (except peaker plants) or nunclear power plants are harder to turn of, so they mostly keep running if there is a short dip in price below zero.
One question that rose to mind while writing this: why is it cheaper to sell at negative price for renewables than to shut them down? I don't know why, but it probably comes down to the fact that shutting down a solar farm or wind farm costs money and time, which is not worth it when prices drop down below zero, because it is most often only for an hour or so.
Because solar power doesn’t work at night and wind power doesn’t work when it’s not windy, so if you don’t have power in the coldest parts of winter you might literally freeze to death.
Also important to note that these parts will expand fast as we switch to electric cars. The power grid in most of Europe could not handle people going 100% electric right now. Solving that will be expensive and time consuming and I think it's highly likely it won't be done fast enough, so we are currently facing two rather large issues that are likely going to get worse before they get better.
I don't understand Europe's electricity issues, but I can talk about it in general terms:
Nowadays, there are many companies that generate electricity and many that consume electricity. These companies have to coordinate so that the load on the electrical grid is balanced at all times. It's a physical constraint due to how electricity works. If there is too much power or not enough, and it continues, it's an emergency situation for the electrical grid; bad things are happening. Often, though, it gets handled and ordinary people aren't affected.
Wholesale prices that vary throughout the day are one way to coordinate. There are others. In some regions like the US Southeast, it's still the case that a single power company owns the generators and takes care of it internally.
Think of negative rates as a penalty that power generators have to pay when they're feeding the grid too much electricity and don't back off. These rates usually don't last because they pay attention and avoid the penalty. Also, if a generator can't shut down very quickly, there are often businesses that can use more electricity than usual. Instead of paying for electricity like they usually do, they're being paid for cooperating with the common goal of achieving short-term balance.
This usually isn't a consumer issue. Consumer rates are mostly fixed. Some people have different rates based on the time of day, but they don't have real-time price changes. (There are a few exceptions. There was one time when a few homeowners in Texas got big bills during a winter storm because they had signed up for real-time prices without knowing what they're getting into.)
Electricity utilities aren't going to go out of business because of this. They're in charge of delivering electricity that they don't make themselves (or at least, not all of it; some do generate electricity as well).
Negative prices aren't a big threat by themselves, but they're a sign that something unusual is going on.
This appears to be moving consumer-wards now. My energy supplier in the UK has started sending me emails saying "electricity is free between 1-2pm tomorrow, use as much as you can" except every time they have I've been out so couldn't run the dishwasher/do some laundry/plug the car in.
I do for export. 1/2 hourly, tracking wholesale rates minus a few percent. I could have a similar tariff for import too but it would likely cost me more than the fixed day/night rates I'm on right now because of how I use power. Sometimes these dynamic rates go negative, although they only ever hit zero for export.
Good to know. “Too cheap to meter, for a limited time, some restrictions apply.”
Would you have caps on prices? I think that’s what went wrong in Texas.
I am pretty sure there is a cap on the dynamic tariff, for some reason I have £1/kWh in my head but I could be wrong. Standard UK prices are around £0.30-0.50/kWh, for comparison.
Energy prices are capped by law here but it's an average charge over a year rather than per unit. Although obviously that translates into a per unit cap in real life, but suppliers are allowed to set their own unit prices as long as the average annual bill works out the same. I think the energy regulator has an average use pattern for suppliers to refer to but I'm not sure.
Many dishwashers have a 'delay' feature. My washer/dryer combo does too, but thats brand new.
My washing machine has always had a timer, but the dishwasher only has since being replaced a couple of years ago. However the washing machine doesn't really draw much power because I mostly wash clothes on cool and it's the heater that really sucks the power; the dishwasher does a bit but fairly sporadically throughout it's ludicrous four and a half hour eco cycle. We don't have a dryer.
Free power during the day is unfortunately not much use to me because free power usually happens on days when my solar panels are generally kicking out more than I can use anyway. In the summer even my battery is charged by 10am or so, because the sun comes up at like 4am. The only thing I could do during the hour of power (sometimes two) would be to partly charge the car and I can't do that if I'm out driving it.
Another thing you can do is use a smart thermostat to dial down the AC 4 degrees, for a (reverse) thermal battery.
In the UK we mostly don't have AC in our houses. My heating system is gas, until the getting-old boiler finally gives up and then it'll probably be a heat pump at which point I can do heating/cooling with electricity. I guess running cold water through the radiators would cool the house. Possibly somewhat inefficiently, I haven't investigated that.
You could probably use room fans in conjunction with the existing radiators to make them more effective for cooling, so something to consider. I'm not sure how practical it is for residential, but I know there's options for large multifamily buildings on radiant heat systems that move the baseboard heat connections to air handlers that let's the system operate better for heating and cooling. But I suspect you're right and radiators on their own probably won't cool very effectively unless the water was really cold.
The central heating runs via 15mm copper pipe. I'm not sure I can squeeze useful amounts of air through that and replacing it all with wider ducts would be ruinously expensive and possibly structurally damaging to the house. Can't put many 100mm holes into six inch joists before people start falling through floors..
That said, I'm definitely going to investigate, largely out of interest. I think when (if) the time comes we'll just have ceiling or wall mounted heat exchangers to blow air around. The house is set up in such a way that would mostly work fairly well.
edit: no you cannot run radiators cold. Not because they won't cool very well (they won't) but because of the obvious-in-retrospect issue of condensation on the pipes! The pipes that weave invisibly through the structure of the house and where you really don't want mould and damp.
What? Says who? 😅 A technicality really.
(But seriously, that's a good point. Hadn't considered that.)
It seems like this should be a temporary problem - with more coordination, it shouldn’t be hard to take solar panels offline quickly when the power isn’t needed, particularly when they’re losing money by not doing that. I wonder why it persists?
What makes you assume it shouldn't be hard?
Some kinds of electricity generators take time to ramp up and down. Turbines act as a flywheel, so they have inertia. But solar panels have no moving parts, so they don't have issues like that.
I mean logistically as well. On panels already installed.
It's usually possible to pay people to stop producing power, or pay other people to use surplus power available on the grid.
I don’t know what sort of logistics issue there might be. It seems unlikely that they would be hooked up in a way that there’s no way to monitor them or shut them off. Did you have something in mind?
There are thousands upon of thousands of individual sonar panel installations. None of them are currently configured specifically for what you propose, at least as far as I know. The inverters might shut off if the net voltage on the net starts to deviate too much, but that is not necessarily due to there being no demand overall but rather overproduction on a highly localized level.
Other than that, it completely depends on the vendor what sort of monitoring is present, more importantly that monitoring is for the owners of the solar panels the energy companies don't have access to that data. The only thing the grid currently can “see” is that energy is being given back. And that also depends on the electricity meters being smart, and these do not have the ability to dynamically switch the ability to deliver power back to the grid as far as I am aware.
Unless I am completely misunderstanding what your idea is. In that case, would you mind expanding a bit on it?
Edit: To be clear, I am not questioning if it is easy on a technical level for individual panels. There is no doubt that “technically” this is solvable. What I am curious about is how you envision this being applied to the thousands of solar panel installations that are already out there. In different countries with different regulations, grid setup, etc.
Because, to me, that task does not fall under the category of “shouldn't be that hard”
So, unless I am missing something, to answer your question. It likely persists because the situation is not as simple as you might imagine.
It sounds like you might have small, retail solar in mind, while I’m thinking of utility-scale solar farms that generate many megawatts of power. it would surprise me if they didn’t have operators monitoring wholesale electricity prices in real time, particularly if they were losing money on multiple days, but I don’t know what they do.
For US prices, there are live maps with real-time, location-specific prices on gridstatus.io.
To be honest, this almost feels like you are shifting the goalpost after it was pointed out that your assumption isn't quite right. But, I'll assume good faith here. So as feedback, I am going to say that it would be more helpful if you start including this sort of context when you make sweeping statements like the one you included in your original comment. When you do not, it leaves people guessing, which makes for a somewhat frustrating conversation. And frankly, it isn't the first time I have seen you do this on some subjects. In fact, it seems that for some reason you tend to do so with electric-utility related subjects more often than not.
Anyway, to get back to the matter at hand. The distinction you are making seems to be based on another assumption that isn't quite right, this assumption being that these large-scale solar farms make up such a majority of production that they are the only concern. Which they do not, it is different per country in the EU but in general when looking it up large-scale solar farms make up half of solar production. The other half is actually produced with rooftop installations.
Things might be different in the US, but to give an example of the scale, in the Netherlands one in three homes has solar panels installed. They make up roughly 41% of the total solar capacity.
Looking around for some other numbers seems to indicate that it's roughly 50% for Germany and 60% for France. So again, the answer to your question remains the same because reality is much more complex than you assumed it to be.
I don’t see it as shifting any goalposts. I don’t have any goal other than achieving a better understanding. It seemed like we were talking past each other so I was guessing at reasons why we might have different ideas about what’s plausible.
It doesn’t seem like utility-scale solar would need to be a majority of solar power for it to significantly improve the balance between supply and demand if some of them shut off?
Anyway, having different ideas about what’s plausible isn’t that important. I’m entirely aware that I’m guessing. When I asked “I wonder why it persists?” That was an invitation for someone else to speak up if they knew something.
Like I said, I am assuming good faith here. But, it really does almost feel like you are just shifting your base to invalidate any answer given. So, I truly hope that you actually did also read and, more importantly, internalized the feedback I gave after that.
Although it feels to me that you possibly did not given this response.
Your initial comment makes it seem that you are speaking with more authority than just plain guessing. It also does not provide enough context as a starting point for someone to give a good answer. Leaving it to other people to fill in that context because you are not forthcoming with that context even when asked about it.
Which makes for a frustrating experience when someone does try to answer the question. Questions intended to ask for clarification are not really expanded on by you and anything that isn't an absolute answer is effectively dismissed with "well yeah, but not like that".
It is, when one idea is rooted in actual data and the other is purely based on mental guesswork without validation.
Anyway, I strongly believe I have been clear enough. I also have provided you with enough details and information to answer your original question even with the latest added qualifiers you added. Which effectively boils down to the situation not being as simple as "just doing X".
Okay, what I’m getting is that it’s frustrating that I didn’t respond more to what you wrote. So, I'll try to do more of that:
I don’t think you’ve provided any wrong information. I agree that there are many providers and installers of solar panels, these systems vary, as does how much monitoring they provide. This is particularly true in the home market. It makes sense that for many of these, upgrading them to respond to real-time energy prices might be difficult. The statistics about solar installations in the Netherlands are useful.
You’ve provided more information than I did, but I disagree that it’s enough to understand what’s going on. For example, I don’t think either of know what sort of monitoring systems utility-scale solar installations have, so I’m still curious about that. I suspect that large installations have stricter requirements because they could do more harm.
You say I didn’t respond to clarifying questions and I think it might be these:
…
I don’t envision anything in particular. I guess I do have an underlying assumption that large electricity generators (providing many megawatts of power) have operators who monitor them and decide what to do based partly on grid conditions, that there are professionals at different companies who work together to keep the grid in balance, despite what unattended home installations might do. And real-time prices are one of the signals they look at. It seems like that’s what real-time prices are for?
When I said “it shouldn’t be hard” I meant that, from the point of view of someone who has read a bit about electrical grids but is hardly an expert, it’s not all that obvious why the professionals can’t do more to compensate for changes in supply and demand. So I’m curious how it works. But that doesn’t mean electrical grids are simple. I should have phrased that better.
Thank you :)
And yes, if you want to know all the details, my information does not provide all the angles. Which is why it is really important to provide better clarity in the question you are asking. For the original question without context, I still think that it provides a base answer. Because it becomes clear very quickly that there are a lot of factors involved.
So I do appreciate that you now have expanded more on it.
I looked into it a bit more and found this Dutch article (Google Translate link) which does go into the matter.
It does show that the situation is again fairly complex. For example, consumer panels are connected to the low voltage grid where solar parks are connected to medium and high voltage grids. They do switch off based on grid load, however it is important to note that this has little to do with the energy price. The reason for switching them off has to do with grid strain, as the energy that is produced also needs to be used. This is obviously closely related to negative prices for energy, as these arise in similar conditions. But in the Dutch literature I can find, it seems that negative pricing isn't the primary concern.
There is one obvious downside to just flipping the switch off for production when there is overproduction. You obviously avoid having to pay for the electricity you produce, but you also are not generating any revenue. So for any solar operator they ideally want to be able to produce electricity when it is sunny, if they can't, it still is a loss of revenue.
So, the more complete answer does seem to be that they do have the ability to switch off production but that this only limits the loss of revenue.
Effectively, I think that the title should have been "Rapid rollout of solar and wind generation has outpaced ability to store power" first instead of the subtitle. We have arrived at a point where our ability to "store" or at least use all produced sustainable power is the limiting factor on some days.
Of course, this is the FT so they decided to go for the financial angle instead.
That is indeed what I meant as something that would be useful to include in a question. I think, including a bit more context about your thought process when asking questions like this also makes it more likely that you will receive a satisfying answer sooner.
Archive.is link.