Surge in Negative Wholesale Electricity Prices in Belgium - Turn Negative Prices into Profit
Smart Curtailment can Boost returns with 15%
Put yourself in this scenario: your business invested in a solar installation. Through curtailing your solar production when prices are negative, you have the potential to increase your returns by an impressive 15 percent.
Negative Prices?
To understand negative pricing, we need to first understand why they occurs. Negative pricing occurs when electricity supply surpasses the demand. This market dynamic can be attributed to various factors:
- High Renewable Energy Output: Renewable energy sources, like wind and solar farms, produce a massive amount of electricity under favourable conditions, often leading to an oversupply.
- Periods of Low Demand: During periods of low electricity demand, such as overnight, during the weekend or during mild weather conditions where heating and cooling needs are minimum, the grid can get saturated with excess power.
- Market and Policy Structures: Certain regions may have regulatory and market mechanisms such as set feed-in tariffs or subsidies. These incentives may lead to excessive production from renewable sources, irregardless of the demand.
Tactics for Solar Panel Owners
There's a silver lining for businesses with solar panels. They can capitalize on negative-priced electricity by optimising their returns using the following strategies:
- Curtailment During Negative-Priced Hours: By minimizing or halting your solar generation during negative-priced hours, you can sidestep costs associated with injecting power into the grid. Advanced metering and energy management systems can automate this process, making it simple and effective.
- Investing in Energy Storage Solutions: By integrating systems such as thermal or battery storage, one can strategically collect and store surplus energy produced during peak-priced intervals. This stored energy can then be utilized or sold back to the grid under more profitable circumstances. It should be noted that using battery storage for this purpose typically proves more straightforward than thermal storage.
- Doubling down on Flexibility: Aligning your energy utilization to correspond with periods of negative pricing can result in noteworthy cost savings. This strategy is not solely beneficial for businesses with solar panel installations, but is also significantly advantageous for large-scale electricity consumers such as industrial facilities and data centres. By modifying energy consumption in response to tariff fluctuations, major power users have the opportunity to increase energy-intensive processes. This approach enables them to seize substantial cost-saving opportunities.
What's next?
With renewable resources like wind and solar becoming increasingly prominent contributors to the electricity supply, occasions when production surpasses demand will happening more frequently. As this pattern becomes more predictable, businesses with capabilities to curtail their energy production during these times or to store the excess energy can strategically benefit. Thus, this market dynamic is expected to influence new energy management strategies as the penetration of renewable energy sources heightens.
Companion.energy is there to help.
Software can help companies smartly curtail energy production and flexibilize energy consumption at the same time, generating further benefits. By using our software product, businesses can typically save between 10 and 30% on energy costs.