German Solar Age's First Eclipse Passes with Brief Surge in Power Price
Stefan Nicola, Weixin Zha, Lorenzo Totaro and Dashiell Bennett, Bloomberg
March 20, 2015 | 3 Comments
PrintBERLIN -- Power prices in Germany fluttered as the first eclipse of the emerging solar age passed and utility operators worked overtime to keep the grid supplied.
The phenomena highlighted the variable flows of electricity coming from such renewables as solar and wind. Coping with that intermittency has risen as an issue for grid operators as Chancellor Angela Merkel pressed for cleaner forms of energy to replace nuclear reactors.
"It will be a challenge but we can manage it," Urban Keussen, chief executive officer of the grid company TenneT TSO GmbH, said as the skies darkened at an operating station near Lehrte about 155 miles west of Berlin. "We can't ignore the volatile production of renewables. We need to expand and modernize the grids."
TenneT brought in 8 gigawatts of generating capacity to balance the grid against solar power that dropped out as the eclipse passed, double the usual rate. It also kept hydropower plants that store energy on standby and coordinated its flows with neighboring grid operators.
While there were no reports of power shortages, prices for electricity in wholesale markets both surged and dipped for a short time.
The data below comes from the European Energy Exchange and tracks actual solar power generation from German power companies during the day. Obviously, solar generation rises steadily during the middle of the day, and then falls to zero as the sun goes down. Friday, however, did not look like most days, as this lightly annotated chart, via Bloomberg's Rob Verdonck, shows.
Power Market
Power delivered from 10 a.m. to 10:15 a.m., when the skies were near their darkest, ranged from 950 euros a megawatt-hour to negative 130 euros, according to the Epex Spot exchange. For the full hour, power ranged from 34 euros to 89 euros. When prices are negative, suppliers are essentially paid not to produce.
"It would have been difficult to deal with a situation like today without conventional power plants," Philipp Goetz, consultant at Energy Brainpool in Berlin, said by phone. "The market has reacted well. People made an effort to buy or sell the power on the market. Only about 30 percent of the balancing power tendered had to be called for by the grid operators. So we haven't been at the verge of a blackout."
While eclipses are relatively rare events, policymakers are concerned that further expanding renewables will make strains on the grid more routine. Following the meltdown at theFukushima plant in Japan in 2011, Germanyordered its nuclear plants to close by 2022. Much of that will be replaced by renewables.
Grid Impact
"It's tougher to manage the grid with a high penetration of wind and solar," said Pietro Radoia, a solar analyst at Bloomberg New Energy Finance in London. "But going forward, grid operators are going to get better at managing. And it's possible that battery storage will help them out."
Some natural gas and coal plants that usually stand idle were tapped to make up for the lost solar power. Previous eclipses such as one in 1999 passed without affecting power markets because photovoltaics only took off around 2004.
China, which is installing more solar panels than any other nation, faces a parial eclipse in March 2016. A total eclispe will cross the U.S. in April 2017.
The darkest part of today's event curved across the north Atlantic Ocean past southern Iceland, the Faroe Islands and reached the west coast of Norway in the Arctic. Mainland Europe saw the sun partly obscured, with 87 percent cover on a foggy morning in London, 83 percent in Denmark and about 25 percent in Turkey.
German Solar
Germany has about 38 gigawatts of Europe's 81 gigawatts of solar capacity and was braced for a 70 percent slump in PV generation, MeteoGroup said. A gigawatt is about the same as a nuclear reactor's capacity.
"Today is an absolute exceptional situation," said Johannes Paeffgen, head of energy trading at Next Kraftwerke in Cologne. "We can see that it is still working well and we didn't get to any price limits set by the exchange."
Solar plants may generate more than 22 gigawatts for the German grid on Friday. If Germany adds wind and solar plants at the rate of the past decade, "then what we see as a crisis will be a daily phenomenon in 10 years," said Peter Hoffmann, head of the control system for TenneT.
Danske Commodities A/S, a power broker, increased staff because consumption during the event was hard to predict, said Bo Palmgren, the company's head of intraday trading.
Swedish utility Vattenfall AB sought to profit by selling output from power plants that normally aren't competitive, including gas- and oil-fired generators that "cost several hundred euros per megawatt-hour to operate," said Hartmuth Fenn, head of intraday market access and dispatch.
Italy has the region's second-biggest solar market and also was affected though more of the sun will be visible at that latitude. Terna Rete Elettrica Nazionale SpA, the nation's grid operator, expected to lose about 7 gigawatts of the 19 gigawatts of available PV supplies. It plans to make a statement this afternoon.
Copyright 2015 Bloomberg
Lead image: Eclipse. Credit: Shutterstock.
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