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Germany’s Negative Power Prices

15 Jun 14:00 by Charles Inett

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We have all been told off for forgetting to turn the kitchen light off. In Germany, the citizens are being paid to keep them on....kinda

We all hate electricity prices but what happens when the country’s supply of clean, renewable power becomes larger than the demand? Well, you just need to look at Germany to find your answer!

Germany aims to rely completely on renewable energy by 2050 and they have hit the ground running. With over $200 billion invested over the last few decades, Germany is well on her way to achieving her goal!

Late last year, the German people received a holiday treat when on a very windy day, their giant spinning turbines produced so much electricity that the cost went below zero.

Negative Power

Wind and solar energy have always been generally inconsistent. If the days are not sunny or windy then they do not pump out that sweet clean energy! But on the other hand, on a partially sunny day, it may produce too much.

Now picture a day, a lazy Sunday. Most businesses are closed and not much electricity is required. Now let's make the day extremely sunny and windy! The power plants cannot store all the excess generation so what happens? Either use it or shut off the plant!

This is all a perfect storm if you are a customer because eventually, the power plants become so full of power that they must use it! In fact, they will pay you to use it. (well technically they don’t put money into your bank account and instead make next months bill cheaper...but the word “pay” is more catchy)

This is what negative power is and it happens more often than you may think.

The Fossil Fuel Problem

We all know the dangers of fossil fuel and it is almost universally agreed upon that we need to try move away from it even though it does have some advantages. Negative power is not a good thing for the companies who are producing it. The technology does not currently exist to hold an abundance of excess power. There is also not an incentive in place to coerce the citizens to use more electricity. Yes, they occasionally get cheaper electric bills, but their household energy bills have been rising!

Fossil fuel can be generated for demand and then stopped when not needed. There will never be so much that it needs to be free! This is all good news for the people who are selling it...just bad news for the planet and our wallets.

What’s the Catch?

When something sounds too good to be true then it usually is. The idea of getting paid to use the washing machine may become a reality but if we never see that extra money due to increasing energy bill prices then there will be no incentive.

With no incentive to use extra electric power at home, it simply is not feasible to go 100% renewable energy. But what is not feasible today may be a reality tomorrow.

Power companies know that the pressure to switch to clean energy will only ever rise and they have already begun to adapt. For example, one of Germany’s largest power company has employed a weather forecaster to anticipate the spikes in power (A job that comes with lots of pressure considering how often the weather forecasters are wrong!)

Ultimately, we don’t suggest getting too excited about negative power as a source of income from your energy supplier. The technology will eventually catch up, but as we move away from fossil fuels, at least we won’t get told off for leaving the lights on!