Energy: Unclaimed, overproduction of renewables is threatened by zero prices – who wins

The problem of zero energy prices continues for several hours a day on a daily basis, as a result of the large penetration of renewable energy sources into the energy mix and the imbalance between supply and demand for energy.

So yesterday Saturday for seven hours the price on the Energy Exchange was almost zero from 11:00 to 17:00. Saturday’s wholesale price was set at €54/MWh in the pre-market today. The maximum price is 133 EUR and the minimum is 0.04 with demand at 142 GWh.

In the production mix, 61% is from renewables, 23.9% from gas, 8% from imports, 4.2% from hydropower, and 0.1% from lignite.

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The problem of zero prices, as well as the cuts in renewables that are becoming more frequent, is the result of the efficiency of renewables overproducing during certain hours of the day, while this energy cannot be absorbed by the system, as there is no demand. The result is that the sustainability of renewables is under threat since the data on their business plans on the basis of which they obtained funding changes.

Fees with contracts

However, near-zero prices threaten half of the renewables in the Greek system, as 6.5 GW of the 12.5 GW installed in the Greek system are paid for with ELAPE contracts, at prices between 50-120 EUR/MWh, regardless of whether Whether or not DAPEEP collects from the sale of the energy they produce.

Consequently, the renewables fund, ELAPE, is forced to pay renewables producers who received tariffs more than it collects. In order to handle these payments, he will need increases in ETMEAR, and he has already requested the first payment, so the “cost” of zero prices, indirectly burdens the consumer, who will have to pay in the next six months incrementally. Itmir On energy bills.

In Greece, power outages last year reached 230 megawatts per hour. It is expected to reach 600 megawatts per hour in 2024, and in 2025 to 1,500 megawatts per hour. These are large numbers that raise serious concerns about the future of the country’s electricity system.

The reduction of green energy and negative prices is a problem facing all electricity systems in Europe. It is a consequence of the systemic disruption that occurs during the green transition, a transition that costs investors, the economy and consumers millions, not only through the large investments it requires but also because of the cost of uncertainty in market design.

But zero prices also have beneficiaries. The big beneficiaries are the vertically integrated producers who can benefit from the commission and will gradually dominate the market. All energy supply companies, which can secure energy at low prices, also benefit.

It remains to be seen whether energy utilities that make big profits by buying at zero prices will eventually pass on lower prices to the market or prefer higher profitability.

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