Since the introduction of the I-SEM in October 2018, Ireland has experienced a high level of negative pricing compared to other European markets. Prices dropped as low as minus €139.44 in February. Negative pricing occurs during periods of very high wind, mostly at night, when it becomes too expensive for power stations to switch off and then back on again when wind energy is low.
In such circumstances, it becomes cheaper for the power station to pay energy suppliers to take their power. It would be a bit like walking into a shop and seeing a negative price on a box of cereal i.e. they are paying customers to take their product.
Negative pricing is a new development in the Irish electricity market, but it is symptomatic of a problem that presumably has been happening for many years. If power stations are unable to switch off during periods of high wind then that means the co2 savings attributable to wind are much less than is often claimed.
In effect, it means we are running a duplicate system, with wind and fossil fuel /other renewables running in parallel with each other.
Power stations affected by negative pricing include other renewables such as biomass and waste to energy which are increasingly having to waste their output to facilitate more wind.
Even though I understand the basic concept outlined here, I would like to see a little clarification for the benefit of readers. This is my understanding of it. There are 3 things the grid operators can do in the situation outlined. First is cut back incoming generation. Instead of cutting back wind they are cutting back waste to heat. (a competing renewable source). They cannot cut back traditional fossil generation because 35% of this is essential to maintain grid stability. Therefore they have a surplus.
ReplyDeleteSecond: They increase demand. The article above calls this demand "suppliers", but they are not suppliers, they are consumers. It could be the heavy stone working plant in quarries, cement producers, grain driers (the electricity for one potato producer is up to 5,000 Euros per week.) Brewers and food manufacturers/processors).
Third : Is to cut back wind generation. This is happening, but only in a small way because these wind companies are loosing heavily and can't go on without a very friendly government backed administration. It is clear from this article that the grid operators are giving their power away and paying to give it away. In effect the problems with wind energy are being farmed out so that they are are not carried by wind farms.
This begs the question of who is in a position use this power? If a cement works decides to work through the night to avail of negative pricing, they will make a cheaper product, but if the wind does not blow they will have to pay for power. The only was this could work is if the grid operators guarantee a negative price when high wind is forecast. If the wind fails to blow they will load other consumers.
In summary, we can see that the goal of installing wind energy to save co2 and reduce fossil use in generation is a farce. The present cost of Ireland's wind farms is over 6 billion Euros, with a lot more for infrastructure. They are loosing 220 million Euros per year. Promised load factors of 34% were false. Eirgrid forecast factor assessed after the close of the last few years at an average of 27% but have admitted to me they were actually only 20%. It's an unbelievable swindle.
The suppliers are the energy companies like say energia who buy the electricity in the market.
DeleteI do not know how the extra unwanted electricity is consumed, perhaps demand side units switch off which would increase demand.
That explains it, officially the intermediaries between generators and consumers are called suppliers. Others are Bord Gais and ESB Electric Ireland.
ReplyDeleteThe original government/industry plan in 2010 was to supply Britain but that fell through. We can see now that there is far too much over capacity and the solution is to increase demand to get rid of the surplus. So they pay consumers to use it up. The cost is loaded back on the consumer and they get away with this because they are a government backed monopoly. It's not enough.
The second move is to bail out wind companies using parent companies. Accounts show parent companies like SSE and the ESB are forgiving debt and loading it on their consumers. National Toll Roads are buying up wind farms and we are likely to see them using toll money to bail out these wind farms.
As there is no link between energy demand and production when using wind generation. You tend to end up with either too much generation to too little. During gusty conditions where gusts exceed 90 km/hr most wind turbines cut out. So back up power(fossil plant) has continue operating or else the grid would collapse.As you add capacity the frequency and extent of these surpluses increase. Negative pricing is a well known phenomena in Denmark . Where the base rate for wind generated electricity over the Scandinavian distribution network is -€200.00 per megawatt hour. The big problem for Eirgrid and the Irish wind industry is the inadequacy of the Interconnector system.Right now we need about 1300 megawatt Interconnector(Ireland market only) capacity to dump this useless output onto the UK market. My understanding is that UK Irish agreements in place allows a base price to-€100 per megawatt hour for EWIC exported wind electricity.The French will probably demand a better deal. The Danes have experienced long periods where the overall price of electricity exported to their impoverished!!! neighbours is negative.As both Norway and Sweden are building increased wind capacity it is likely that negative pricing over the Scandinavian Distribution network will increase significantly.
ReplyDeleteIs it not true to say that negative pricing reverses conventional rules for buying and selling? Demand is static yet government insists increasing supply to accommodate more renewables which in turns needs more fossil fuel.
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