Negative prices for electricity, precursors of a black out?

" Most critical periods,... massive oversupply,.... strong denial prices for electricity,.... high upward frequency deviation "

The European Network of Transmission System Operators for Electricity, ENTSOE, has just published its annual report concerning the analysis of the next passage of the winter 2013/2014, to verify that at any time, the demand in electricity can be covered by the electricity production for hundreds of million customers who benefit from this electric interconnection. It covers all the Western Europe and is linked in the Maghreb by a submarine connection through the Strait of Gibraltar.

Https: // www.entsoe.eu/publications/system-devel opment-reports / outlook-reports/

If the projected balance enters the supply and demand does not reveal potential shortage for the passage of the next winter, a situation at risk is clearly identified by part the situation created in Germany with the occasional productions (pages 55 and 56 of the report this above referenced).

Germany, has from now on a significant settled power of occasional energies, 36 300 MWe in photovoltaic, with an increase of + 5100 MWe this year, and 34300 MWe in wind energy, with an increase of 3700 MWe this year.

The sharp demand in case of very big cold is in Germany around 80000 MWe, and must be covered by other means if this peak takes place one evening at the time of an anticyclone of big cold. A first risk can appear in this situation in case of break in the supply of gas to feed in the gas the cycles combined which produce some electricity in Europe.

The second risk can appear with the non compliance with the said safety regulations of n-1 (the network must not be affected by the sudden loss of one of its components) on the German network considering the too important flows which can be generated by the conjunction of a strong wind production in the North and a strong consumption in the South of Germany.

There is finally a risk of " black out " potentially inferred by a surplus of occasional production.

The cost of the production of these occasional productions, in euro by MWh, is very upper to market prices (market price around 50, wind energy around 80, photovoltaic in more of 200 euro the MWh). To invest in these means of production, it was necessary to grant to the investors of the subsidies which are covered by the German consumer.

Yet, the photovoltaic and wind production, depending respectively on the sun and on the wind, can be very widely superior all in all to the needs for the German demand.

In one such situation, having saturated the interconnections with the nearby countries, the only way of maintaining the balance grafts the supply and demand is to cut the production of the occasional energies. Not make it led to create a additional risk on the electric system by increase of the electric frequency in case of overproduction with regard to the demand. In case of overtaking of certain threshold, the release of all the network, " black out " is inevitable.

Just before " black out ", an ultimate action generated by the market is committed by the network managers, the " control towers of the traffic ". They introduce a negative signal for the electricity price, to incite to evacuate the surplus by encouraging consumption and to stop the works of production unsubsidized.

Of such situation reflect a double wasting, an incentive to consume pointlessly some energy, and illustration of an overequipment in occasional means of production while the network is not adapted.

Such situations, very unstable, potentially precursors of an electric black out on the whole Europe, were already noticed more than hundred times over the last twelve months.

translation of the french article " prix négatifs de l'électricité, précurseurs d'un black out" written on 2013 November 29 on blog de Malicorne

rainbow in Puisaye November 2012