A new report published by the German Federal Network Agency “Bundesnetzagentur” examines periods of negative electricity prices from 2016 to 2018. Negative electricity prices occur when too much power is being fed into the grid and operators of power plants pay for electricity to be taken from them.
The report revealed that during periods of negative electricity prices between 2016-2018, 18-26 GW of conventional generation was fed into the grid while the grid only needed around 4-8 GW in order to operate. This 4-8 GW is called “minimum generation” and this is the second report on the topic of minimum generation that has been released by the government.
Conventional power plants must operate between specific output ranges in order to provide power to the grid at all. The problem in Germany, the report found, is that even when operating at their lowest power limit, the conventional generators were still oversupplying the grid, accounting for 28-43 percent of the inelastic generation. If they were more flexible, this problem would not have occurred, the report said.
The report noted that some
operators have already invested in technologies that allow for more flexibility
and added that more investments in this area could further reduce the
conventional generation base.
Heat supply obligations are often contrary to a more flexible operation, said the report. A survey of power plant operators regarding their deployment decision at a hypothetical exchange price of €-100 / MWh showed that operators of CHP plants in particular would continue to feed in electricity even if the negative market price persisted. Incentives from self-generation schemes were also mentioned as a reason to accept negative market prices.
Renewable generation “bottlenecks”
The agency also found relationships between transmission and distribution bottlenecks for renewable generation and the minimum generation of conventional power generators.
A significant portion of renewable energy overgeneration (39-88%) was due to bottlenecks between the transmission and distribution networks. In these cases, the abatement of conventional power plants at transmission system level would not have made a difference. Therefore, specific incentives for a swift elimination of such bottlenecks should be investigated, said the report.
For a comprehensive integration of renewable generation, it will be important to gradually reduce the conventional generation base and to increase the level of minimum generation that can be produced by renewables.