fbpx

Latest Posts

Home

Facebook

Twitter

Search
About

Power Prices Go Negative! But…Is This a Good Thing?

The Star Tribune thought this New York Times article so newsworthy that it republished it: “Power prices go negative in Germany, a positive for energy users.” If you scan the article casually, it looks like a tribute to wind energy:

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.

Negative electricity pricing is, as the article acknowledges, a fluke. But doesn’t it show how effective wind energy is? No, actually, it shows the opposite.

The problem with wind energy is that it is not “dispatchable.” This is a polite way of saying it us unreliable. Unlike reliable energy sources–coal, natural gas, nuclear–the supply of wind energy can’t be calibrated to the demand. You don’t necessarily get it when you need it. If it is windy at a time of low demand, great–but the energy can’t be stored, so it is essentially given away.

On the other hand, if the wind stops blowing, wind turbines stop producing electricity. This is why we can’t rely on wind energy. If the wind doesn’t blow, it is unacceptable for lights to go off, traffic signals to go dark, elevators to stop between floors, electric-heated homes to grow cold, etc. So reliable energy sources must be maintained in a volume sufficient to meet peak demand. Wind energy is an expensive afterthought.

Still, you might ask, don’t these negative power prices benefit consumers, if only occasionally? No, they don’t. If you read to the end of the Times article, you find this:

Do consumers benefit?

Not directly. The wholesale costs of power make up only about a fifth of the average household electricity bill in Germany. The rest is a stew of taxes, fees to finance renewable-energy investments and charges for use of the grid.

You can read all about the failure of Minnesota’s renewable energy policies in the Center’s blockbuster report by Steve Hayward and Peter Nelson.

Comments

Subscribe

Categories

Upcoming Events

  • Sen. Rudy Boschwitz Presents “Magnificent America”

    Location: Signatures 22852 County Road 17 Winona, MN 55987

    Please join Center of the American Experiment in Winona on Wednesday, September 18th for an evening with Sen. Rudy Boschwitz as he discusses “Magnificent America.” Rudy Boschwitz was born in Berlin, Germany in 1930. Rudy’s Dad came home the day Hitler came to power and told the family they would leave Germany forever. They settled in New Rochelle, New York. He came to Minnesota in September 1963, where he started Plywood Minnesota. Rudy ran successfully for the U.S. Senate, where he served from 1978-1991. Rudy was President George H. W. Bush’s Emissary to Ethiopia. His mission resulted in Operation Solomon,…

    Register Now
  • Morning in Minnesota Breakfast: Alexandria

    Location: Alexandria Golf Club 2300 North Nokomis Northeast Alexandria, MN 56308

    Please join Center of the American Experiment on Wednesday, September 25th at the Alexandria Golf Club for breakfast with Center policy fellow and education expert, Catrin Wigfall, as she explains the Center’s “Great Jobs Without a Four-Year Degree” project. Following her presentation on workforce development issues, Catrin will be joined by a panel of local leaders to discuss how Alexandria can better attract and retain young talent. Wednesday, September 25, 2019 Alexandria Golf Club 2300 North Nokomis NE, Alexandria, MN 56308 8:00 AM Breakfast & Check-in 8:30 AM Presentation 9:30 AM Conclude Free, RSVP Here

    Register Now
  • Fall Briefing Featuring Kimberley Strassel

    Location: Ordway Center for the Performing Arts 345 Washington Street, St. Paul, MN 55102

    Purchase Tickets Here

    Register Now