Paying negative prices for power seems weird, but situations can occur when electricity producers get away cheaper by paying consumers money. From April on, negative electricity prices are possible at the European Energy Exchange in Leipzig, Germany, the largest energy exchange in Central Europe.
As wind power has gained a considerable share in the German electricity production – the nameplate rating of wind power is 22,000 megawatts which covers on average more than 7% of the total German energy consumption – the fluctuations can cause surplus generation and threaten the stability of the grid. In this case of too much supply and too little demand, electricity producers had to slow down the production of other power plants which is expensive and can lead to fatigue of material. But since April, electricity producers can stimulate demand by paying large consumers money. This enables them to maintain production which is much more economical and efficient.
Another option is to export electricity, but it appears that there is not enough demand – neither from domestic consumers nor from abroad.
To avoid situations like those, electricity companies spend large amounts of money on good wind forecasting to plan when and in which scale power plants should produce energy. Another sector which relies on accurate forecasting is the solar sector and traders at energy exchanges. When a lot of sunshine is expected to drive up solar power production in addition to windy conditions, the price for electricity is likely to fall.
As the share of renewable energies is increasing in Germany, researchers are looking for solutions to apply and combine several sources of alternative energies efficiently and intelligently. Tools to achieve this goal are accurate forecasting and a system which controls the capacity and the operation of all power plants. Such a system would make renewable energies more marketable as they could rather be operated like established power plants.