Europe faces an unusual problem: ultra-cheap energy - https://web.archive.org/web/20240620151949/https://www.economist.com/finance-and-economics/2024/06/20/europe-faces-an-unusual-problem-ultra-cheap-energy
“problem”?
A power companies largest expense is maintaining the grid. If their only product has to be sold at negative prices, then there is no money to pay people to maintain the grid. An under maintained gridgrid can lead to very serious consequences, ref:Texas.
It’s almost like energy should be seen as a public service rather than a source of profits. Like education, health, water, etc.
Sounds like a good reason for the state to sponsor some energy intensive environmental work. Like desalination plants or those ungodly carbon capture rigs that are super energy inefficient.
In Norway we pay a fixed monthy fee, a fee based on the maximum load we use during the month, in addition to a fixed fee per kWh to the company owning/maintaining the grid in our area. This is in addition to and completely independent of the price we pay to the “power company” based on for example the spot price.
Grids need to be carefully balanced. If the cost is approaching, or lower than 0 then that means the grid is actually in a critical state. A lot of generators cannot be switched off (or at least not quickly). If more power goes into the grid than is used, then it can destabilise the whole grid and cause a blackout.
The solution to the problem is actually 2 fold. We need more sinks, and a smarter grid.
More sinks is mostly in the form of storage. They buy power when it’s cheap, and sell it when the cost spikes. It also extends to other heavy uses. Traditionally, aluminium smelting helps a lot with this. It uses huge amounts of electricity, and and switch on and off rapidly.
We also need a smarter grid. We need homes that know what the grid needs. E.g. electric cars than can actually as local buffers, or air conditioning that times it’s draw to help balance the grid.
sell it to who? This is just like saying you’ll just find shelter under another tree when enough rain has started making it through the leaves of the one that’s sheltering you now.
And that’s why it’s currently a problem. There’s not enough buyers, and not enough capability to switch supply in and out.
Without the price incentives to build large scale storage, it hasn’t been done. The problem is that there is a delay between needing the storage, and it actually being built at scale.
Oh no how tragic.
