Discussion about this post

User's avatar
Mislav's avatar

Just a suggestion, as this part is a bit confusing: "The graph shows that, as of the end of September 2024, the number of hours with negative prices is roughly the same as the number of hours with prices below 10 €/MWh, both around 400 hours."

It should read "The graph shows that, as of the end of September 2024, the number of hours with negative prices in 2024 is roughly the same as the number of hours with prices below 10 €/MWh in 2023, both around 400 hours."

Expand full comment
Mike Parr's avatar

Empirically, there is little to argue with. Problems start with the narrative/analysis at the end. Negative prices occur because renewables (CAPEX-based) are forced into a marginal market which suits OPEX-based systems. Marginal markets are treated in a quasi-religious way ("our market which art in heaven" etc) instead of an objective way. To some extent, this is understandable if you are a trader & rely on market volatility to make money - at all costs you want to keep markeginal markets going - regardless of their suitability or lack thereof for CAPEX-based system. However, a failure to recognise this reality, leads to a situation where the assumption is that modest changes to marginal markets can fix the situation. The other failure in the analysis is that as the amount of renewable increases - so do surpluses - in a non-linear fashion. This is not an assertion but can be proved - for just about any size of system (regional or national). In terms of the solutions offered - not attempt is made to consider scalability. For example, which systems at a national level (or local level) offer the possibility to store 200GWh - 500GWh of electicity (national) or 3MWh (locally). If Germany hits some of its targets for RES, these are the sort of national surpluses it will face post 2030. Batteries have a minor role to play - electrolysers have a major role. The problem is that on the one hand RES only gets funded if the flow of revenue is certain, on the other hand it is proposed to use "market mechanisms" (we will incentivse things) to pull on RES. Remind me how well market mechs have worked so far? Well they haven't because they can't. Energy transformations are engineered (horse) - markets are then used for cost optimisation purposes (cart) - once the transition is made. Currently we have the cart (markets) standing in front of the horse (engineered transition) and we are wondering why nothing is happening.

Expand full comment
3 more comments...

No posts