On Christmas Eve and early into the next day, Germany’s power trading exchange, EPEX Spot, had to pay companies and other large energy consumers up to $60 per megawatt-hour to use energy. The company bills consumers negative rates when too much power is generated from renewables and there’s a low demand for it.
In general, experts say, solar and wind generation is wildly inconsistent, with a lot of it based on the season. For example, Germany expects wind turbines to produce around 12 percent of overall power, but that the number can significantly rise if there are major winds. With more capacity being added all the time, it can supply far more energy than anticipated.
Germany alone has spent over $200bn on the renewable industry in the last 20 years; and since fossil fuel can’t shut down and restart easily, it’s better for the exchange to pay consumers to use the excess energy being produced.
The power generation has been so high now that, for over 100 times in 2017 alone, the company had had to send zero bills to consumers just to encourage them to use electricity! “The situation is more frequent than other European countries have seen. We now have technology that cannot produce according to the demand, but is producing according to the weather,” Tobias Kurth, managing director of Energy Brainpool, said. “(This is one) of the key challenges in the whole transition of the energy market to renewable power,” Green Matters reports.
In a related instance, the American State of California had invested heavily in solar power. Now, there’s so much energy that other states are sometimes paid to take it. According to LA Times, last March, for 14 straight days, Arizona utilities got a gift of free solar power from California.
California produced so much solar power in those days that it paid Arizona to take excess electricity its residents weren’t using to avoid overloading its own power lines. Those transactions helped save Arizona electricity customers millions of dollars in 2017, though grid operators declined to say exactly how much.
The number of days that California dumped its unused solar electricity would have been even higher if the state hadn’t ordered some solar plants to reduce production — even as natural gas power plants, which contribute to greenhouse gas emissions, continued generating electricity.
Solar and wind power production was curtailed a relatively small amount — about 3% in the first quarter of 2017 — but that’s more than double the same period last year. And the surge in solar power could push the number even higher in the future. “The state has achieved dramatic success in increasing renewable energy production in recent years. But it also reflects sharp conflicts among major energy players in the state over the best way to weave these new electricity sources into a system still dominated by fossil-fuel-generated power,” LA Times reports.
There have been instances where power generation companies (GENCOs), in Nigeria, have produced excess electricity, but the power distribution companies (Discos) have lacked the necessary capacity to transmit it. Nigerians have complained that rather than give the consumers the excess power for free when there is an increase in generation, the Discos actually reject the power. The public is rather billed for darkness than given free electricity.