The more volatile supply wind and solar energy that comes online in Germany, the more insane the market prices become. Too often the wind blows and the sun shines when power is unneeded, or they are simply AWOL when demand is high like in the wintertime.
Germany’s wildly fluctuating wind and solar energy are creating grid and market havoc. Source: Agora.
Earlier this month Germany saw a spate of both sunny, windy days, thus leading to huge power grid surges during the Ascension holiday weekend, a time when many factories were running close to idled (see chart above).
Despite billions annually in subsidies, wind and sun still puny
And for a few minutes last Pentecost Monday afternoon – a holiday that saw very low national electricity demand – wind and solar provided almost enough power to cover all of the country’s electricity needs, reported Die Welt here. Leading Greens cheered, and proclaimed that coal and nuclear had not been needed for a time. But they cheered “too early” writes Die Welt’s business journalist Daniel Wetzel, pointing out that market and technical conditions became dangerously precarious and that in total “electricity represents only 21% of Germany’s total energy need.”
While Germany’s installed solar and wind energy may be able to get fairly close to fulfilling total electricity demand for a few minutes in rare instances that weather and demand conditions are just right, their share of total primary energy is still depressingly measly. Die Welt puts it all in true perspective:
Despite billions in subsidies, ‘renewable energies’ wind and sun covered only 3.7% of Germany’s primary energy needs last year.”
Negative wholesale prices becoming rampant
Another debilitating feature of the weather-dependent renewable energies are the havoc they create on the electricity exchanges. Last week’s power grid overloading by wind and sun led to deep negative wholesale prices.
Spiegel here writes that the wholesale power price plummeted to -130 euros per megawatt (see blue curve in the right chart)! Literally, foreign consumers were being paid to take the power. (The black curve shows total German demand).
Moreover the phenomenon of negative wholesale prices (i.e. excessive power feeding uncontrollably into the grid) occurred a record 25 times in 2015, Spiegel writes. That was 4 times more often than in 2011.
Among the highest electricity prices in the world
With wholesale electricity prices dipping into negative territory, one might think that power must be very cheap for the consumer. Unfortunately this is not the case. At negative prices power companies lose money, and so are then forced to pass along these extra costs along to the end consumers. German consumers are paying close to €0.30 for each kilowatt-hour they consume – among the highest in the world.
The situation has gotten so alarming that leading politicians of Chancellor Angela Merkel’s CDU conservative party are now demanding an end to subsidies for new wind and solar installations.
Denmark slams brakes on wind projects
Not only Germany is struggling with wildly fluctuating grid and market conditions, which are leading to massive costs and pain for consumers, but so is Denmark. Die Welt writes:
The situation has also led wind energy leader Denmark to a rethinking. Press reports say that Energy Minister Lars Christian Lilleholt has stopped the planned construction of five large offshore wind farms in order to protect consumers from large cost increases.”