On Sunday 24 May, the price of sustainably generated solar and wind energy was negative from 3 a.m. to 18 p.m. A historically long period.
Lecturer Martien Visser at the Hanze University of Applied Sciences Groningen is not immediately ready to find a conclusive explanation for why this was the case for so long. “It was not particularly sunny in the Netherlands and most of the time there was not too much wind. It is understandable that it happens on Sunday. In that case, the electricity price is always lower, because demand from, for example, offices and shops comes to a standstill on Sundays. Unlike many other economic activities.”
No stock building possible
If an unusual amount of sustainable electricity is produced in the Netherlands due to weather conditions, it is often a solution to export to our neighboring countries. This was difficult or impossible yesterday because they also had to deal with a lot of supply there, which also resulted in negative prices.
The electricity market is very sensitive to fluctuations in supply and demand. Unlike natural gas and oil, electricity cannot be stored cheaply and in large quantities. In addition, we continue to use electricity, whether it is expensive or cheap. A few percent imbalance can then cause multiple price changes in percentages, just like with agricultural products, as happens with milk and coffee.
Renewable energy contract
According to Visser, the record-long negative energy price does not have to mean that producers actually have to pay. “Just like in potato cultivation, most of it is produced and delivered according to contract agreements. Otherwise, the price risks due to possible imbalance in supply and demand are too great.”
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