In Germany, consumers get paid for using power
Germany has spent $200 billion over the past two decades to promote cleaner sources of electricity. That enormous investment is now having an unexpected impact — consumers are now actually paid to use power on occasion, as was the case over the weekend.
Power prices plunged below zero for much of Sunday and the early hours of Christmas Day on the EPEX Spot, a large European power-trading exchange, the result of low demand, unseasonably warm weather and strong breezes that provided an abundance of wind power on the grid.
Such “negative prices” are not the norm in Germany, but they are far from rare, thanks to the country’s effort to encourage investment in greener forms of power generation. Prices for electricity in Germany have dipped below zero — meaning customers are being paid to consume power — more than 100 times this year alone, according to EPEX Spot.
Battery storage capacity, meanwhile, is not yet advanced enough to take in all of the excess generation. And because older power plants that run on fossil fuels take a long time to ramp up and reduce electricity generation, they are not able to respond decisively enough to the shifting supply.
Power producers are learning to adapt to this new world. RWE, one of Germany’s largest operators of power installations, takes advantage of negative prices by being paid to pump large volumes of water into a mountain lake in Austria. When prices are higher, the company releases the water, using turbines to generate electricity. “We are able to ramp units down, and switch the pumps on,” said Martin Keiner, RWE’s head of commercial-asset optimization. “You can earn a lot on flexibility.”
