The news that Chile is offering customers free electricity due to a surplus in generation is good news for customers. It prompted me to look into which other markets are seeing similar situations and it is interesting to note that in Texas customers have been offered free ‘off peak’ electricity in order to manage surplus generation. The New York Times reported late last year that more than 50 companies in Texas "offer overnight plans that charge higher fees during the day, but nothing between the hours of 9 pm and 6 am.”
Of interest, however, is what negative pricing means for utility companies and what impact it will have on them in the long-term. According to a post by CEPS (the Centre for European Policy Studies), "The negative power prices recorded [on Christmas day 2015] in central Europe suggest that some wholesale market participants were actually paid for consuming electricity. The European Power Exchange (EPEX spot) reported negative spot prices on that day in Germany/Austria and France, with the lowest-recorded price in intraday trading at €-500/MWh in Germany/Austria. Even the average for all hours of the day was negative in Germany and Austria (€-57 in the day ahead market) and barely positive in France.”
What is the cost of this intermittency and uncertainty for the more traditional utility, and what is the overall impact on pricing and investment into the sector generally?
According to Michael Lynch in a recent post in Forbes, "The intermittency problem can be solved—at great expense—with storage and grid upgrades. But the various costs involved are all imposed on Germans, whether the shareholders in utilities, taxpayers or, most of all, consumers.
"In Texas, problems caused by excess windpower were reduced by construction of US$7 billion worth of new transmission lines, an indicator of the costs involved in ‘making the grid safe for renewable power’."
Do you have an opinion on how the increase in renewable energy generation and distributed generation is affecting your utility? Share them with us at firstname.lastname@example.org
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Due to the surplus of solar generation in Chile over recent years, consumers have been offered electricity for free. According to the Independent, solar capacity on Chile’s central power grid, has more than quadrupled to 770 megawatts in the last three years. [Solar surplus sees Chilean consumers receive free electricity]. It is reported that in some parts of the country, spot prices dropped to zero on 113 days in the first four months of this year and is expected to beat 2015’s total of 192 days.
US power utility ComEd begins its demand response programme Peak Time Savings to help customers with smart meters to reduce their power usage and costs this summer. The number of consumers participating in this year's programme has reached a level - 160,000 registrations. [ComEd kickstarts summer DR programme]. The demand response initiative was started on June 1 and will run through to September 30. Through the platform, the utility allows its customers to earn US$1 for every kilowatt-hour they save during peak periods.
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Operational intelligence software provider OSIsoft announced its collaboration with the China Electric Power Research Institute on a smart grid project. According to a release, the smart grid project will leverage OSIsoft’s PI System as a data infrastructure for real-time data monitoring, analytics and reporting. [ China and OSIsoft collaborate on smart grid project]. The China Smart Grid Substation Operations and Communication Project is designed to form the basis for China to develop relevant new standards for future Smart Grid operations and communication architectures and deployment. The project announcement was made at the US - China Climate-Smart / Low-Carbon Cities Summit taking place in Beijing.