Although energy production in conventional power plants fell again in 2023, renewable energy is doing quite well on the Polish energy market. For the second time this year, we are dealing with negative energy prices related to increased electricity production from photovoltaics and wind turbines. Unfortunately, negative energy prices can be a problem for prosumers producing electricity for their own needs. The solution is to store surplus energy. Why?
A new record in the Polish energy sector – as many as 5 hours of negative energy prices
This year's autumn surprised us with beautiful, sunny weather. This resulted in an increase in energy production from renewable energy sources. Increased sunlight and strong winds are driving new records in Polish renewable energy. On the weekend of October 7-8, renewable energy sources covered as much as 97% of the country's energy demand. On Sunday, October 8 alone, 9 GW of energy was generated from solar panels and 6 GW from wind turbines. 15 GW of energy combined with reduced consumption related to the non-trading Sunday was enough to meet 107% of the electricity demand. The result was 5 hours of negative energy prices and increased energy exports abroad. What are negative energy prices and what do they mean for prosumers?
Negative energy prices in a nutshell
As we have already mentioned, favourable weather conditions translate into increased generation of electricity from renewable energy sources. In such a situation, energy production exceeds actual demand. In many European countries (including Poland), energy production and consumption operate within the so-called energy exchange market. This means that the electricity produced goes to auctions, where interested entities can buy it at specific rates. The highest energy prices on the exchange are when demand for it increases. In turn, the price drops when demand is low. In a situation of increased production and the associated surplus of energy, negative prices appear. In principle, this means that energy producers pay for someone to accept their surplus energy. The reality is not as drastic, but it will not change the fact that private prosumers lose out in a situation of negative energy prices. This phenomenon reduces the monthly sales prices of energy on the exchange for prosumers.
See also: Negative energy prices – is investing in photovoltaics still profitable?
Negative energy prices are nothing new
Negative energy prices, contrary to appearances, are nothing new. They have been appearing on many European markets for years. According to data from smard.de, in Germany the phenomenon appeared for 69 hours in 2022, 139 hours in 2021, and 298 hours in 2020 (the effect of the pandemic, which significantly reduced demand for electricity).
According to experts, negative energy prices are the result of the low flexibility of the energy system. Some power plants (e.g. coal-fired) are not adapted to the situation of overproduction of energy from renewable sources. Shutting down and restarting a power plant is expensive and time-consuming.
In the coming years, there may be more periods with negative prices. Therefore, prosumers who do not want to suffer losses when prices are negative must protect themselves on their own. The solution is to store energy.
Investing in an energy storage facility is an investment in savings and energy security.
The possibilities of storing energy in Poland are still quite limited. Therefore, at the time of increased production from renewable energy sources, which took place recently, energy export abroad increased. For the first time in history, we have contracted over 4 GW of commercial export.
Negative prices are forcing prosumers to look for more effective ways to use electricity from photovoltaic micro-installations. In addition to the current increase in self-consumption (landing electric cars or installing a heat pump), the solution is to install an energy storage facility and store the surpluses produced. After the introduction of hourly billing next year, energy prices will be the lowest at the time of the highest production. Storing unused energy will naturally protect against financial losses. The accumulated surpluses can be used at the time of reduced production, thus increasing self-consumption.
Undiscovered potential on the Polish market
Investing in energy storage is not a popular practice on the Polish market. Under the Mój Prąd 5.0 program, out of 24.5 thousand applications, only 1.4 thousand concerned energy banks.
There is no doubt, however, that investing in an energy bank pays off. It is a way to become more independent from price fluctuations on the energy market (which will undoubtedly repeat themselves in the coming years) and to ensure energy security. It is an investment in a certain future!
