Monday 6 May 2019

Irish Market Experiences High Levels of Negative Pricing

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.