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Does someone want to elaborate why it's interesting/important that wholesale electricity prices were low one day during a long weekend?

by Hamuko 6mo ago

SideburnsOfDoom 6mo ago
Energy prices being low is interesting and important right now, since we are undergoing a petrochemical energy price increase shock.
- flanked-evergl 6mo ago
  Prices being negative for one day does not make energy prices low. The "green shift" in Germany has increased the use of fossil fuels and the price of energy. From JP Morgan's 16th Annual Energy Paper, March 2026 https://cdn.jpmorganfunds.com/content/dam/jpm-am-aem/global/en/insights/eye-on-the-market/fighting-words-amv.pdf https://cdn.jpmorganfunds.com/content/dam/jpm-am-aem/global/... > In 2024 we estimated that had Germany not decommissioned nuclear power after the Fukushima accident, it would have needed 50% less electricity generation from fossil fuels, 84% less generation from imported natural gas, 27% less fossil fuel capacity and 42% less natural gas capacity. Another road less traveled: Germany’s electricity prices in 2024 were almost 25% higher than they would have been had the country kept its nuclear power online . And as shown below, Germany might not have experienced such a sharp increase in its electricity imports which are 2x higher than a decade ago as a share of consumption. > More nuclear shutdown repercussions: Germany’s industrial power prices were 3x higher than the US and China in 2024, and part of the reason why Germany has been experiencing the deindustrialization shown on the right.
  - SideburnsOfDoom 6mo ago
    > Prices being negative for one day does not make energy prices low. My apologies, that was poorly worded - I didn't mean to imply that all energy prices were low across the board. Of course they are not. It's an interesting indicator, not (yet) a systemic change. And as I said in answer to the parent comment, it's a important subject right now because of the petrochemical price shock. Nevertheless, if I were to interpret your statement as unilaterally as you interpreted mine: you said "negative prices are not low prices", which is wrong as a matter of arithmetic.
jones89176 6mo ago
it makes private energy storage a viable investment option. You can just invest in a large battery (or other storage system) and make a profit over buying/selling energy. I really hope, this happens on a big scale and further reduces the dependency on fossil fuels (at least over 24h. winter is a different question)
- arpinum 6mo ago
  It does not make private energy storage viable on its own. You need to get enough charge/discharge cycles out of it in a certain time period. This means you need almost daily high price fluctuations. We aren't seeing that in Europe. We see high winds push down prices for multiple days and we see multiple weeks with consistent high prices in the winter, with occasional drops on the weekend.
  - __d 6mo ago
    It’s a daily event now in Australia. Very low prices during the middle of the day, and higher in the morning and evening. Anyone with a battery or an EV they don’t need to drive far can play the market, usually with scripted sell/buy trigger points. There’s enough profit to make the payback period for a decent battery quite short.
    - arpinum 6mo ago
      Yes, I see energy-intensive industry moving away from extreme latitudes in the long run. Most of Europe is at an unfortunate latitude and has surprising levels of cloud cover.
      - __d 6mo ago
        Yes. Europe has far more wind than Australia, I imagine for that reason.
- thyristan 6mo ago
  It doesn't, for reasons of price. For consumers, power prices consist of the actual price of power, plus network fees. Network fees are fixed at (on average) something like 10ct/kWh or 100€/MWh. So negative prices are only really negative if the power price drops below those -100€/MWh, which rarely happens (the usual dips are at low single-digit cents per kWh). And even then, there is the issue of network fee double-dipping: Depending on the contract you have with your power company, the size and kind of storage you are operating, and the phase of the moon and your donations to the ruling party, you will be charged network fees twice, once when buying the power, once when selling it again. In that case, the threshold would be even worse, at -200€/MWh. And all that doesn't factor in the cost of the storage infra. Edit: And there is another factor: The current very low dip is in the intra-day prices. But contracts for consumers use day-ahead prices, which usually don't include those very large dips that result from miscalculations of weather and dispatch capacity. Edit2: Just check https://tibber.com/de/preisrechner https://tibber.com/de/preisrechner (use e.g. 10119 as Postleitzahl) and scroll down for the graph. Today, they give a negative day-ahead price of -1.5ct/kWh, but including network fees, taxes and their cut, you still end up paying 18.2ct/kWh...
arpinum 6mo ago
The only interesting part is that renewable production in Europe is so random that there can be far too much for short periods. The wholesale price system is not a reliable signal or incentive for electricity generation supply and demand in Europe. There are various subsidies, taxes, levies, and fixed costs not shown at the wholesale level that completely change calculations. These numbers will make customers upset and complain about price gouging if they don't understand the disconnect. Or, it makes customers think that renewables are cheap because they are not seeing the subsidies that on net result in higher payments to renewable providers than carbon-based producers.
jfengel 6mo ago
It's an indicator of how far they've come in supplanting fossil fuels. Today it's one day; soon it will be two, then a week. They can start thinking about next steps.
- flanked-evergl 6mo ago
  No. From JP Morgan's 16th Annual Energy Paper, March 2026 https://cdn.jpmorganfunds.com/content/dam/jpm-am-aem/global/en/insights/eye-on-the-market/fighting-words-amv.pdf https://cdn.jpmorganfunds.com/content/dam/jpm-am-aem/global/... > In 2024 we estimated that had Germany not decommissioned nuclear power after the Fukushima accident, it would have needed 50% less electricity generation from fossil fuels, 84% less generation from imported natural gas, 27% less fossil fuel capacity and 42% less natural gas capacity. Another road less traveled: Germany’s electricity prices in 2024 were almost 25% higher than they would have been had the country kept its nuclear power online . And as shown below, Germany might not have experienced such a sharp increase in its electricity imports which are 2x higher than a decade ago as a share of consumption. > More nuclear shutdown repercussions: Germany’s industrial power prices were 3x higher than the US and China in 2024, and part of the reason why Germany has been experiencing the deindustrialization shown on the right.
  - SideburnsOfDoom 6mo ago
    Two things can be true at the same time, such as: Germany decommissioning nuclear power was a huge loss, and also, rising use of renewables is a success story.

Does someone want to elaborate why it's interesting/important that wholesale electricity prices were low one day during a long weekend?

by Hamuko 6mo ago

Does someone want to elaborate why it's interesting/important that wholesale electricity prices were low one day during a long weekend?

SideburnsOfDoom 6mo ago

Energy prices being low is interesting and important right now, since we are undergoing a petrochemical energy price increase shock.

flanked-evergl 6mo ago
Prices being negative for one day does not make energy prices low. The "green shift" in Germany has increased the use of fossil fuels and the price of energy. From JP Morgan's 16th Annual Energy Paper, March 2026 https://cdn.jpmorganfunds.com/content/dam/jpm-am-aem/global/en/insights/eye-on-the-market/fighting-words-amv.pdf https://cdn.jpmorganfunds.com/content/dam/jpm-am-aem/global/... > In 2024 we estimated that had Germany not decommissioned nuclear power after the Fukushima accident, it would have needed 50% less electricity generation from fossil fuels, 84% less generation from imported natural gas, 27% less fossil fuel capacity and 42% less natural gas capacity. Another road less traveled: Germany’s electricity prices in 2024 were almost 25% higher than they would have been had the country kept its nuclear power online . And as shown below, Germany might not have experienced such a sharp increase in its electricity imports which are 2x higher than a decade ago as a share of consumption. > More nuclear shutdown repercussions: Germany’s industrial power prices were 3x higher than the US and China in 2024, and part of the reason why Germany has been experiencing the deindustrialization shown on the right.
- SideburnsOfDoom 6mo ago
  > Prices being negative for one day does not make energy prices low. My apologies, that was poorly worded - I didn't mean to imply that all energy prices were low across the board. Of course they are not. It's an interesting indicator, not (yet) a systemic change. And as I said in answer to the parent comment, it's a important subject right now because of the petrochemical price shock. Nevertheless, if I were to interpret your statement as unilaterally as you interpreted mine: you said "negative prices are not low prices", which is wrong as a matter of arithmetic.

jones89176 6mo ago

it makes private energy storage a viable investment option. You can just invest in a large battery (or other storage system) and make a profit over buying/selling energy. I really hope, this happens on a big scale and further reduces the dependency on fossil fuels (at least over 24h. winter is a different question)

arpinum 6mo ago
It does not make private energy storage viable on its own. You need to get enough charge/discharge cycles out of it in a certain time period. This means you need almost daily high price fluctuations. We aren't seeing that in Europe. We see high winds push down prices for multiple days and we see multiple weeks with consistent high prices in the winter, with occasional drops on the weekend.
- __d 6mo ago
  It’s a daily event now in Australia. Very low prices during the middle of the day, and higher in the morning and evening. Anyone with a battery or an EV they don’t need to drive far can play the market, usually with scripted sell/buy trigger points. There’s enough profit to make the payback period for a decent battery quite short.
  - arpinum 6mo ago
    Yes, I see energy-intensive industry moving away from extreme latitudes in the long run. Most of Europe is at an unfortunate latitude and has surprising levels of cloud cover.
    - __d 6mo ago
      Yes. Europe has far more wind than Australia, I imagine for that reason.
thyristan 6mo ago
It doesn't, for reasons of price. For consumers, power prices consist of the actual price of power, plus network fees. Network fees are fixed at (on average) something like 10ct/kWh or 100€/MWh. So negative prices are only really negative if the power price drops below those -100€/MWh, which rarely happens (the usual dips are at low single-digit cents per kWh). And even then, there is the issue of network fee double-dipping: Depending on the contract you have with your power company, the size and kind of storage you are operating, and the phase of the moon and your donations to the ruling party, you will be charged network fees twice, once when buying the power, once when selling it again. In that case, the threshold would be even worse, at -200€/MWh. And all that doesn't factor in the cost of the storage infra. Edit: And there is another factor: The current very low dip is in the intra-day prices. But contracts for consumers use day-ahead prices, which usually don't include those very large dips that result from miscalculations of weather and dispatch capacity. Edit2: Just check https://tibber.com/de/preisrechner https://tibber.com/de/preisrechner (use e.g. 10119 as Postleitzahl) and scroll down for the graph. Today, they give a negative day-ahead price of -1.5ct/kWh, but including network fees, taxes and their cut, you still end up paying 18.2ct/kWh...

arpinum 6mo ago

The only interesting part is that renewable production in Europe is so random that there can be far too much for short periods. The wholesale price system is not a reliable signal or incentive for electricity generation supply and demand in Europe. There are various subsidies, taxes, levies, and fixed costs not shown at the wholesale level that completely change calculations. These numbers will make customers upset and complain about price gouging if they don't understand the disconnect. Or, it makes customers think that renewables are cheap because they are not seeing the subsidies that on net result in higher payments to renewable providers than carbon-based producers.

jfengel 6mo ago

It's an indicator of how far they've come in supplanting fossil fuels. Today it's one day; soon it will be two, then a week. They can start thinking about next steps.

flanked-evergl 6mo ago
No. From JP Morgan's 16th Annual Energy Paper, March 2026 https://cdn.jpmorganfunds.com/content/dam/jpm-am-aem/global/en/insights/eye-on-the-market/fighting-words-amv.pdf https://cdn.jpmorganfunds.com/content/dam/jpm-am-aem/global/... > In 2024 we estimated that had Germany not decommissioned nuclear power after the Fukushima accident, it would have needed 50% less electricity generation from fossil fuels, 84% less generation from imported natural gas, 27% less fossil fuel capacity and 42% less natural gas capacity. Another road less traveled: Germany’s electricity prices in 2024 were almost 25% higher than they would have been had the country kept its nuclear power online . And as shown below, Germany might not have experienced such a sharp increase in its electricity imports which are 2x higher than a decade ago as a share of consumption. > More nuclear shutdown repercussions: Germany’s industrial power prices were 3x higher than the US and China in 2024, and part of the reason why Germany has been experiencing the deindustrialization shown on the right.
- SideburnsOfDoom 6mo ago
  Two things can be true at the same time, such as: Germany decommissioning nuclear power was a huge loss, and also, rising use of renewables is a success story.