The electricity price can reach zero, at least in the wholesale market. More, it can go in negative. And the odds are greater with renewables.
Spain demonstrated this last April 1st, thanks to the increase in production from wind and hydroelectric power, as confirmed by data from the Iberian Energy Market Operator (Omie).
But it is not the only case: in Europe the minus sign has already been recorded in Germany, Austria and Scandinavia. It happens in periods of the year when energy demand is lower, such as spring, and in the time slots in which the sun warms and gives light, such as the central hours of the day.
ELECTRICITY, PRICE REDUCED ALSO IN ITALY
“Also in Italy we have had 4 or 5 consecutive hours of zero energy prices on the wholesale market, especially in the last Sundays”, explains the professor Filippo Boveraprofessor of electrical systems for energy at the Piacenza branch of the Polytechnic of Milan.
Prices go negative when production plants are kept running even if demand drops: for example, in cases where stopping them and restarting them later would cost more.
But for renewable power plants there is a further element to take into consideration. Unlike what happens with fossil fuels, the marginal costs of the plant are practically non-existent. In other words, while using natural gas involves a purchase expense, sun, wind or water are free.
“The area of Piacenza, for example, as well as the rest of the Po Valley, do not lend themselves to massive installations of wind farms, as they are areas with little wind – adds Bovera – while the situation is different for photovoltaics, especially when it is combined with reality productive such as small and medium-sized enterprises, of which Emilia is full, or cultivations in the agrivoltaic sector”.
BILLS WILL NOT LOWER
But if we are dreaming of a world where we will no longer pay the electricity bill, better open your eyes. In Spain, no relevant benefits have been reported for consumers, especially for those returning to the free market. Beyond the Iberian government measures, which provide for an increase in VAT every time the general price of energy falls below 45 euros per MWh, there are reasons common to all countries, including Italy.
“If the price of energy were always zero, no one would have any interest in investing in renewable plants,” points out Bovera. “Rather, you need a differently split contract with your supplier, where part of the price will depend on fluctuations in the day-ahead market (mgp), and another part will be established directly between the supplier and the renewable producer. This will result in a stable and convenient purchase price, which will remain unchanged for several years and will not depend on fluctuations in the wholesale market or on any geopolitical interests”, concludes the Polytechnic professor.
We would therefore continue to pay the bill, even if most of the electricity consumed came from renewable sources.
Land on which Italy is, among other things, still behind as Legambiente reports in the Checkmate of Renewables 2024 report: only 5,677 MW of new plants installed last year, compared to the 90 GW we would need by 2030.
And as many as 1,376 projects on the waiting list, blocked by the slow issuing of authorizations and other administrative and bureaucratic delays.
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Tags: energy prices renewable sources bill drop
