Power Prices Go Negative in Germany

The article doesn’t actually answer the questions it purports to answer. Better source: <a href="https:&#x2F;&#x2F;www.cleanenergywire.org&#x2F;factsheets&#x2F;why-power-prices-turn-negative" rel="nofollow">https:&#x2F;&#x2F;www.cleanenergywire.org&#x2F;factsheets&#x2F;why-power-prices-...</a>.<p>Energy markets are artificial markets designed to create various price signals that result in certain incentives on both generation and demand, subject to numerous constraints. One constraint is that demand and supply must balance. The grid can’t store much energy. Oversupply can cause grid frequency to go above 50&#x2F;60 Hz, threatening grid stability: <a href="https:&#x2F;&#x2F;www.e-education.psu.edu&#x2F;ebf483&#x2F;node&#x2F;705" rel="nofollow">https:&#x2F;&#x2F;www.e-education.psu.edu&#x2F;ebf483&#x2F;node&#x2F;705</a>. Power prices go negative when there is too much generation capacity online at a given instant, relative to demand. That creates incentives for generators that can shut down (like natural gas) to do so.<p>Negative power prices are not a good thing for consumers. A negative price in the wholesale electric markets does not mean the electricity is &quot;less than free.&quot; Obviously, even wind power or solar always costs positive money to generate in real terms. Instead, it signals a mismatch between generation capacity, storage capacity, and demand. In a grid with adequate storage capacity, negative prices would be extremely rare.

Hopefully they&#x27;ll introduce caps that take power costs to a minimum of zero.<p>I say this with some experience - here in Northern Ireland we&#x27;re the world leaders in terribly thought out (and utterly stupid) energy policies, and the economic effects of them.<p>(Our government recently collapsed, primarily due to a dispute over a programme that saw farmers paid ~£1.12 for every £1 of biomass energy they consumed, with no upper cap. Needless to say, there are empty barns in the middle of nowhere at 30°C inside right now causing a lot of pollution and &quot;making&quot; their owners a fortune. As a result of how much it has cost and is projected to, a lot of spending has just been cancelled, including badly needed hospitals).<p>So yeah, clean energy is great, when it&#x27;s combined with sane policy.

It seems like a good first world problem to have, begging for engineers to come up with an elegant solution!<p>What can a country do with occasional excess power like this?<p>* Communal&#x2F;City water pumps run only during periods of excess power in a week<p>* City managed parking buildings that charge electric vehicles for free during these periods<p>* Heck city&#x2F;country runs a data center that would &quot;turn ON&quot; servers only during periods of excess power in grids - to be used for public purpose data munging!<p>* Run an internet archiver that spins up crawlers only during periods of excessive power..<p>* Use the excess power to run air purifiers or CO2 absorbers or something else cool for the environment that we would not run otherwise..<p>What would YOU do if you had free power?

I&#x27;m curious here about what, if anything, these these negative electricity prices might mean for cryptocurrency mining and transaction processing. How feasible would it be to set up compute infrastructure that &quot;soaks up&quot; the extra power in the German market, but is -- presumably -- idle a lot of the time? For example, is this a good application for distributed networks that piggy-back on top of other peoples&#x27; computers (with permission, of course). See, for example, historical examples like SETI@home, Folding@home, and Popular Power.

I see this as an important stage of going green:<p>Recently&#x2F;Currently: Unpredictable spikes in wind+solar power make it less profitable to run base-load power plants, since they can no longer guarantee profit at 100% of their duty cycle. Cleaner natural gas peaker plants replace the coal+oil baseload capacity.<p>Currently&#x2F;Soon: solar+battery costs fall below natural gas costs, so battery-storage systems replace peaker plants.<p>Near future: The transportation network converts from gasoline to electricity, absorbing spikes in generation.<p>Further future: baseload is entirely wind+solar, small and moderate spikes go into batteries that are distributed throughout the grid. But because baseload capacity is scaled to typical demand during typical weather, there are periodically very, very large power generation spikes when wind or sun is strong, generating a lot of temporary energy at essentially 0 cost. I hope this power is used to power negative-emission technologies.

Based on the results of the grid battery system in South Australia it looks like this is the next step for Germany.<p>Add the batteries for peak smoothing and then you can start to take off the more problematic (carbon foot print wise) base load sources.

A bit dated (2011) though touching on the economies of power generation, &quot;The High-Stakes Math Behind the West&#x27;s Greatest River&quot; ( <a href="https:&#x2F;&#x2F;www.forbes.com&#x2F;sites&#x2F;jonbruner&#x2F;2011&#x2F;10&#x2F;20&#x2F;the-high-stakes-math-behind-the-wests-greatest-river&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.forbes.com&#x2F;sites&#x2F;jonbruner&#x2F;2011&#x2F;10&#x2F;20&#x2F;the-high-s...</a> ) is an interesting read.<p>From the NYT article about Germany:<p>&gt; At the same time, other mainstays of the country’s electricity supply, especially some coal and nuclear power plants, are unable to dial back quickly enough, leading to negative prices on electricity trading markets.<p>From the Forbes article about the Columbia river (Oregon &#x2F; Washington):<p>&gt; issue is what happens when too much electricity is on offer. The enormous supply of hydroelectricity during spring runoff can push electricity prices to zero—the BPA gives away electricity to local utilities for free when it’s forced to produce more than it wants to. Since wind producers enjoy production subsidies, they can push rates below zero, effectively paying other utilities to switch off their generators. Last winter, the BPA told wind producers under its balancing authority that it wouldn’t pay negative rates to them during high-water events.<p>This gets more complicated when you also take into account the non-power constraints on hydro generation. Environmental concerns limit how much water can go over the spillway (which hyper-aerates the water and increases turbidity... which is bad for the fish. <a href="http:&#x2F;&#x2F;www.oregon.gov&#x2F;deq&#x2F;FilterDocs&#x2F;Coltmdlwqmp.pdf" rel="nofollow">http:&#x2F;&#x2F;www.oregon.gov&#x2F;deq&#x2F;FilterDocs&#x2F;Coltmdlwqmp.pdf</a> gets into this including the water standards act.<p>&gt; The concentration of total dissolved gas relative to atmospheric pressure at the point of sample collection shall not exceed 110 percent of saturation, except when stream flow exceeds the ten-year, seven-day average flood. However, for Hatchery receiving waters and waters of less than two feet in depth, the concentration of total dissolved gas relative to atmospheric pressure at the point of sample collection shall not exceed 105 percent of saturation;<p>The interconnectivity of all of these factors is quite interesting to me and one of those things that is much deeper than a simple management of the power market.

I’ve always wondered: is it not possible to simply “unplug” some of the turbines from the grid? Would an “unplugged” turbine that was still spinning result in damage to its self?

So, I work in this field, and I have to find it really annoying to see the NYTimes miss the big picture.<p>The price for electricity tomorrow from 12 to 1 was set in the Day Ahead Market already, by all the participants (generator owners, utilities, big consumers.) At that market (making up numbers for the sake of explanation), let&#x27;s say the utilities together bought 22000 KWH for that one hour. The amount of money changing hands is quanitity times price, let&#x27;s say at $30 per KWH.<p>12 o&#x27;clock comes around, and for whatever reason, consumers are just not flipping enough switches and consumption is 20000. Now at the Real Time Market, money changes hands to get enough generators to dial back production, and enough big time consumers to dial theirs up.<p>Some times utilities don&#x27;t buy 100% of their power on Day Ahead, taking the risk that they can get a decent deal at Real Time for the small amount of top-up they will need. SOmetimes they overbuy because of bad forecasts. That&#x27;s when negative pricing kicks in.<p>Back to our example: Consumers only need 20000KWH for that hour. So 2000KWH&#x27;s worth of dials need to turn. The people turning the dials get paid for it, at that negative price.<p>But the amount of money changing hands is small compared to what happend the day before when forecasted power was scheduled.<p>TLDR:This is not a big deal.

Negative prices occur all the time in the US. Not every day, but often enough when load is low and the wind is blowing. As more and more renewable are built, this will occur in increasing amounts. We still have to have non-green generation online as wind and solar can massively fluctuate. For the time being, the state commissions help out the utilities via legislation and increasing rates. This isn&#x27;t some conspiracy, but what you do if you want available power 24x7.

Perhaps its time we started to design power-consuming devices to take advantage of fluctuating electricity costs. That would be one application of &quot;the internet of things&quot; that I don&#x27;t immediately find creepy and pointless. Alternatively, it could simply spur the private investment of increasing battery technology as consumers would have an incentive to simply charge up their own energy supplies to get a reduction in their overall utilities bill.

Crypto mining (bitcoin et al.)&#x2F;incentivized node hosting will figure this whole thing out.<p>But seriously, civil power generation&#x2F;storage via solar will allow folks to escape the patchwork rules, regulations, laws, etc. that are already here and coming to a jurisdiction near you. Power utilities may not buy your power but your mining rig will make you crypto that will allow you to escape that control.

We need ways to store the excess power. Otherwise, wind and solar use will have their limits. Fossil fuels will need to power half the grid.<p>“Battery storage capacity, meanwhile, is not yet advanced enough to take in all of the excess generation.”

This is a process systems issue more so than a market one. The inflexibility of traditional energy sources and unpredictability of renewable energy sources coupled with the inability to store energy conspire against the balance of supply and demand. When there’s too much energy suppliers can’t simply shut it off on a daily basis nor can they store is for excess use and so to deal with market forces they allow prices to go below zero which helps no one, especially not the consumer. What if we created more flexible energy distribution channels from energy stored and not generated daily? Is this possible?

Just as a curiousity. Is this negative power often enough to make a business model of battery supply to the power system feasible?<p>I mean having a company with a massive bank of batteries. When power goes negative they try to take as much as they possibly can from the network and when it goes positive they try to sell it back at the higher rate. Essentially win-win. You only power up on negative days and you sell when you make money, otherwise you just sit on it. And since you were paid to take the energy in the first place losing it over time when you don’t sell isn’t a loss because you didn’t pay for it at all.

I&#x27;ve also heard that negative power prices are an indicator that excessive subsidies are present in the market. Is this true? I think I saw it here on HN in the comments a year or two ago when it happened in Texas.

And on German news sites: <a href="http:&#x2F;&#x2F;www.spiegel.de&#x2F;wirtschaft&#x2F;service&#x2F;strompreise-steigen-laut-einer-verivox-analyse-zu-jahresbeginn-noch-weiter-a-1185047.html" rel="nofollow">http:&#x2F;&#x2F;www.spiegel.de&#x2F;wirtschaft&#x2F;service&#x2F;strompreise-steigen...</a><p>Strom wird zu Jahresbeginn noch teurer<p>Die Strompreise sind hoch wie nie - und es geht noch weiter: Das Verbraucherportal Verivox rechnet für das kommende Jahr mit einem Preissprung. Obwohl die Versorger Nachlass geben könnten.

Why did they go negative instead of zero or just very low? Why did the power company encourage people to needlessly waste electricity? Do excess generated electricity cause problems for the companies? If yes, won&#x27;t shutting down some generators get rid of the excess?<p>This is my first questions to the headline. The answer is not obvious for me, but I can&#x27;t find an answer in the article.

Creating the electricity market was one of the biggest mistakes humans have ever made because it created the potential for Enron. And now we don&#x27;t even question the existence of the market. There&#x27;s a lot of good history to discover here. The merchants of power by John Wasik is a good place to start.

Do consumers really get paid to consume? Never heard of anyone having a negative item on the electricity invoice.

Ironically, the &quot;related coverage&quot; article was how Puerto Rico was still without power..

Article says price was $60&#x2F;megawatt-hour, and that the inversion lasted &quot;for much of Sunday and the early hours of Christmas Day&quot;.<p>How much current can a typical industrial user draw from their connection?<p>Maybe there&#x27;s a market for large internet connected resistors.

Isn&#x27;t this supposed to be solved by better batteries? I&#x27;m confused why the supply of energy matters, unless there&#x27;s a limited amount of time to use it.<p>I&#x27;m not an electrical engineer, so if anyone understands this better, please correct me :-)

It would be cool if there were some home automation devices that monitored power prices and they would atomatically turn on the washing machine and such when the prices went negatice + there was stuff to wash in the machine for example.

&gt; What causes negative prices?<p>&gt; Basically, when the supply of power outstrips demand for it.<p>What does this even mean? Why would demand for <i>being paid</i> to use power be finite?<p>It doesn’t make sense to view demand as separate from the price of consumption.

<a href="https:&#x2F;&#x2F;medium.com&#x2F;@datarade&#x2F;the-germans-and-their-renewables-c9263f10b33e" rel="nofollow">https:&#x2F;&#x2F;medium.com&#x2F;@datarade&#x2F;the-germans-and-their-renewable...</a>

and other countries still suffer from clean energy resources. Only because of economic interests for energy sales. In some countries the environment is being destroyed only for some hydropower plants, here is an example: <a href="http:&#x2F;&#x2F;www.ecoalbania.org&#x2F;ebrd-confirms-negative-impacts-of-albanian-hydropower-plants-on-people-and-the-environment&#x2F;" rel="nofollow">http:&#x2F;&#x2F;www.ecoalbania.org&#x2F;ebrd-confirms-negative-impacts-of-...</a>

Yes, I think it&#x27;s negative for me that the energy prices are rising.<p>I&#x27;m in Germany and the local news here is different from the Utopia I have to read on Hacker News and Reddit.

If you have to pay for the grid to take the electricity you generate, the sensible thing to do is stop generating it, even if your costs are all fixed.

The real question is would the bill in the end be lower like this or with a positive energy price, but no green-power taxes?

Now that we&#x27;ve seen negative interest rates and negative power prices, what&#x27;s next?

So, is Germany going to pay me for mining BTC&#x2F;ETH&#x2F;XMR? :D

What kind of energy consumer adjusts their electricity usage based on price?<p>Seems like this doesn&#x27;t apply to households - people will just switch stuff on when they need something, they probably don&#x27;t even monitor prices. I&#x27;m guessing this is good for energy-intensive industries that have large battery storage capacity?<p>*didn&#x27;t read, paywall

If they remade The Graduate, I think the key industry would be: Batteries

The fun thing is that three-phase EV charging is common in Europe. Renault Zoe even support 40kW+ charging.

Time to mine coins in Germany...

how is this sustainable in the long term?<p>if the energy companies are paying their customers, won&#x27;t the companies run out of money eventually?<p>and if they run out of money, then won&#x27;t they have to be subsidized by the government? and if that happens, isn&#x27;t that basically people paying taxes, which go to the electric company, which go back to the people?

Germany has<p>1) one of the highest prices per kWh for the normal consumer<p>2) prices are still increasing <a href="http:&#x2F;&#x2F;www.spiegel.de&#x2F;wirtschaft&#x2F;service&#x2F;strompreise-steigen-laut-einer-verivox-analyse-zu-jahresbeginn-noch-weiter-a-1185047.html" rel="nofollow">http:&#x2F;&#x2F;www.spiegel.de&#x2F;wirtschaft&#x2F;service&#x2F;strompreise-steigen...</a><p>3) produces more CO2 than France.<p>So what&#x27;s the news?

Of course, when Capitalists read this article, it is bad news for them because they can no longer make money off people. Better stick to oil and coal for maximum profit! #MAGA<p>&#x2F;s

Germany actually needs to pay other nation states around it to take the energy they can&#x27;t use (they don&#x27;t want it). Using the energy intelligently (demand managment) only lowers smoothes the energy spikes of renewable energy only by 11% (when you do it monthly, on a daily base its nearly nothing.) Pump stations are a good idea but the amount of pumpstation we would need only for the current German electricity demand exceeds already what you could build in all of Europe.<p>Currently when there is a lot of wind we stop coal burning power plants and the government pays its owner for what they could have been produced in that time. Because stopping the plant makes it more inefficient, there are some fix costs around it to operate it.<p>See this interesting video about the topic (its in German sorry): <a href="https:&#x2F;&#x2F;youtu.be&#x2F;ZzwCpRdhsXk" rel="nofollow">https:&#x2F;&#x2F;youtu.be&#x2F;ZzwCpRdhsXk</a>