The past few days, electricity prices in Europe dropped below zero and almost the market did not clear in Germany. Earning hundreds of Euros per Megawatthour by simply consuming electricity is not a one-time phenomenon but a pattern that emerges throughout the years now. 

How did negative prices develope in Europe?

There seems to be a great increase again as Montel showed for Spain and Portugal and increase of negative hours from 48 to 397 hours for Q1 in Spain and an increase to 222 hours in Portugal. Also the development of countries like Germany, Finland, France and Poland can be seen in the new report from Montel.

How to benefit from negative prices as industry?

The answer is pretty simple. Shift energy use from fossil fuels to electricity and replace fossil fuel combustion with electrical process heat generation. This is particularly straightforward for steam, thermal oil or hot air, especially where a network supplies these heat carriers within an industrial park or similar. The first step is to install an electrical heat generation plant and use it during peak hours. This replaces expensive fossil fuels, allowing industries to benefit from very low energy prices or even generate income. For direct supply during hours of negative prices, an e-boiler or heat pump is ideal. 

The only requirement is sufficient capacity in the grid connection. Through either their own or a third party's trading, industries can access spot market prices.

What benefits are there in Thermal storage having negative electricity?

Using thermal energy storage, such as the Kraftblock system, improves the economics of using negative-priced hours. While direct supply can be achieved using electric equipment, the Kraftblock system enables negative prices to be transported throughout the day, reducing energy costs for more hours, or even for the whole day. This not only reduces energy costs, but also decarbonises the process and reduces the necessary amount of carbon certificates. So for the next springs, summers and falls, this could be a large solution to cut energy costs and increase income. We provide more analysis and calculations for the cost benefits of thermal storage like Kraftblock for industries in this whitepaper in general and in a whitepaper for the food industry specifically.

Why batteries alone wont turn the trend of negative electricity

Batteries already help to balance the grid and reduce negative prices. However, they are typically only used once a day, during sunny periods. They are therefore charged very quickly within 2–4 hours, and there is no additional demand from them for the rest of the day. Long-duration energy storage systems like Kraftblock are therefore a valuable addition to the energy system, as they can charge and store energy for longer, changing the way consumers approach energy storage. After sunset, the batteries discharge, maintaining acceptable prices and a high proportion of renewable energy. However, the stored energy in a Kraftblock system quickly becomes beneficial, and thermal energy is still delivered to a process at prices from the sunny part of the day. 

What happened with the negative prices May 1st in Germany and why?

On may 1st, prices dropped down to -€499,90/MWh and the market almost did not clear. The whole week, prices went down under €0 due to the high amount of Solar power from PV being generated in the sunny weather. May 1 was particularly negative as it is a public holiday in Germany and there is less demand in the electricity system. As PV Solar is hard to curtail in Germany, the consequence of the public holiday was an impromptu issue at the energy market. 

This can be very easily compared to the rest of the weak, where the generation of PV SOlar was similar, but the price pressure was not. So while this was a unique situation due to the public holiday, the general trend of low prices will continue and thus industries can count in the next years on this business model. 

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