A challenge for the energy transition
The number of hours with negative electricity prices in Germany is increasing rapidly. By mid-August of this year, we had already recorded 330 hours with negative prices – more than in the whole of last year. This development is closely linked to the expansion of renewable energies. Our current forecasts assume that this figure could rise to up to 1.000 hours per year by 2030 – and beyond that by 2035. We have taken into account the future flexibility potential of BESS, electrolysers, e-mobility, and home storage systems.
How do negative prices arise?
Negative electricity prices arise when the supply of electricity exceeds demand – especially when there is a high feed-in of wind and solar energy. One reason for this is the lack of flexibility in conventional power plants. They cannot simply reduce their output at such times for technical or economic reasons and have to accept negative prices. Secondly, RE plants in the market premium model also have no incentive to reduce production (at least as long as the negative price does not exceed the market premium). This price anomaly is not only a technical phenomenon but also poses economic challenges.
Why are negative prices problematic?
Negative prices are a burden on the EEG account, which is used to finance the promotion of renewable energy plants. The lower the electricity price, the more the difference must be offset by subsidies. To reduce the burden, there are mechanisms that suspend the market premium if there are several negative hours in a row. From January 1st, 2025, the market premium for new installations in hours with negative prices will no longer apply. However, this increases the uncertainty of refinancing for plant operators and thus inhibits the expansion of renewable energies.
What solutions are there?
Flexibilities! Flexibility is key to reducing the number of hours with negative electricity prices and stabilizing the energy system at the same time. Here are some possible solutions:
- Battery storage systems: They can store surplus electricity and use it at times when generation from renewable energy sources is lower. This applies to both large stationary battery storage systems and Vehicle-2-Grid-capable electric vehicles.
- Electrolysers: These can increase their operating time in times of high renewable energy feed-in and low electricity prices to use surplus electricity to produce hydrogen. This produces valuable hydrogen for transportation, industrial applications or for reconversion into electricity.
- Dynamic electricity tariffs: These tariffs make the favorable electricity prices during hours of high RE generation available to end consumers. They create incentives to shift their own electricity consumption to these times. At the same time, more expensive hours become cheaper due to the lower demand, which primarily benefits consumers who cannot simply shift their load.
Our commitment at E-Bridge
E-Bridge is actively working to promote the expansion of this flexibility. Our team of experts supports investors and project developers of battery storage systems with comprehensive know-how on revenue opportunities, regulatory framework conditions in the German market and grid connection procedures. We also advise energy suppliers on the introduction of dynamic electricity tariffs. Our hydrogen experts help investors, energy suppliers, gas network operators and industrial companies to integrate hydrogen economically and intelligently into the energy system of the future.
The energy transition brings challenges – but also enormous opportunities. With our expertise and innovative approaches, we support our partners in making the most of these opportunities and helping to shape the energy system of the future.
