Negative electricity prices: solar records and their consequences for Europe!

Negative electricity prices: solar records and their consequences for Europe!

In Europe, the frequency of negative electricity prices is expected to achieve record values, which is the rapid view in the middle of the challenges on the electricity market. According to a report by Econews Solar power production has achieved new highs in the second quarter of 2023. This development is favored by severe hydropower, transmission bottlenecks and the expansion of renewable energies, which creates an oversupply of electricity.

The Swedish price zone SE2 is particularly striking, which recorded the highest number of negative hours in the first half of 2023 with 506 hours. There are also significant negative hours in other countries: Spain with 459 hours, the Netherlands with 408 hours and Germany and France with 389 and 363 hours. The causes of these trends are diverse, including the current market mechanisms and the limited storage capacities that can affect the stability of the power supply.

Growth of solar power generation

In the second quarter of 2023, Europe produced a total of 104.4 terawatt hours (TWH) solar power. Germany contributed 29.0 TWH to this, followed by Spain with 15.8 TWh and France with 9.9 TWh. The growth compared to the previous year is also remarkable, with an increase of 20 percent in Germany and even 40 percent in Great Britain. These significant growth illustrate the growing role of renewable energies in the European Energy Mix.

However, the challenges are increased by temporary overproductions and low reserves in Central, South and Southeast Europe. The first signs of a regulated market have shown in recent years that operators of conventional power plants, blocked or switched off systems, partly pay for the disposal of excess electricity in order to avoid overload. "Negative electricity prices arise when the offer exceeds this," explains Dinosaurs, whereby the demand is low, especially in times of high electricity production, such as on Sundays and public holidays.

A look at the market developments

The market landscape is also shaped by geopolitical developments, in particular by the continuing conflict in Ukraine and instability in the Middle East, which increase volatility on the LNG and gas markets. These aspects increase uncertainty in the European power supply system.

Another factor is the current problem with French nuclear power plants, which must be reduced due to corrosion problems and high water temperatures in the hot season. This could lead to further tensions on the electricity market.

With a view to the future, Jean-Paul Harreman from Montel Analytics warns that the record levels of negative electricity prices are expected in the third quarter of what industrial customers and large consumers should cause to observe the price fluctuations closely. While short -term negative prices can offer savings for consumers, the long -term integration and sustainability of renewable energies remains in the focus, such as Vienna.at determined. Technologies such as smart grids for intelligent control of energy use are crucial for progress in the area of ​​the energy transition.

The current situation, which is characterized by massive planning deficits and an urgently needed expansion of the storage capacities, shows that the European heads of state and government are facing major challenges in order to shape the transition to a net zero future.