Love A Good Graph!

The following two graphs drifted across my internet horizons yesterday.

The first show the spot price for electricity in Germany four years ago (2008):

Note the trough over night, matching limited demand, and how things ramp up to 9am, then stay at that level until starting to decline in early evening.

The second graph is the same spot price earlier this month:

Again the trough over night and the peak up to 9am. However, things then get very different! After 9am the price collapses back to the 4am level, and doesn’t start to rise again until 5pm.

What explains this difference? In the time between these two graphs ~20Gw of solar power have been installed. On a sunny day, or at least a day on which it is sunny where solar is installed, power is generated cheaply enough to make it impossible to charge more.

As noted in the original article:

But there is one further salient feature in the comparison of the chart from 2012 with the one from 2008. Last week, the spot price did not dip below 35 euros per megawatt-hour, whereas prices started at 20 euros – nearly half as expensive – four years ago. Over a 24-hour period, the price of power on the spot market is indeed lower today than it was back then, but how do we explain the nearly doubling of power in the middle of the night? Given that baseload demand has hardly changed, it must be assumed that power companies are charging more in times of lower demand now that they cannot make their old profits during daylight hours.

Which makes it pretty clear that the market still isn’t really working. My question would be: how long until renewables (and presumably storage) make uneconomic to continue to burn things to generate power? If i was running a conventional power company, with a large investment in machinery required to put geology into the air, i’d be nervous

[Most of the obvious rebuttals to statements about this not being feasible are answered here. Spot prices (current and historical for europe are available here.]

The big question is why this isn’t happening in other markets? All the talk of Japan suffering power shortage during the hot summer days seems to be babble that could be addressed, at least in part, by installing gigawatts of solar / wind. The sooner they get started the sooner they be shot of Tepco!

Advertisements