Negative power prices is tantamount to wasted power said MGP’s head of commercial operations, Duncan Burt. Burt suggested that the system in the UK is out of balance, and recommends majority users reduce consumption during peak times, and take advantage during period of excess green power. The issue of increased mid-day supply is not only an issue in the UK. In California, as well, utilities are worried about an increase in mid-day supply.
The new mid-day supply, that worries so many utilities operators, comes from an expected increase in the available solar power expected to come online in the next 5 years. With this increase in supply, the demand for mid-day power might fall - signalling an opportunity for those of us that need inexpensive electricity mid-day. The below chart, recently made popular in the more geeky energy circles, can be seen below:
West Coast Duck:
The U.K. government plans to boost the share of energy demand met by renewables to 15 percent in 2020 from 5.3 percent in 2013, possibly boosting price fluctuations, and giving users from large commercial facilities to smaller venues greater incentive to adjust consumption proactively. Ten years ago, intraday trading was a small market with counterparties balancing relatively small fluctuations. This has changed due to the increased installed wind and solar capacity and the need to balance greater volumes, much more frequently. Short-term volatility driven by renewables has for the last few years provided more opportunities than the relatively flat calendar products. In fact these new intra-day trading opportunities are so large, that non-utility and non-commercial players are entering the market. This same market dynamic has caused an increase in intraday power trading in mainland European Trading desks, as smaller and smaller operators try to get their piece of the duck.
The U.K. was Europe’s biggest market for new solar capacity in 2014, reported Bloomberg New Energy Finance in London. Capacity will rise almost 5 percent to over 8 gigawatts by the end of 2015, according to Eclipse Energy. The tipping point for negative prices in the U.K is 10 gigawatts of renewable capacity, said Burt. With these same pricing patterns expected in California, and any state with a high amount of solar and wind coming online, we expect to see new battery-based businesses, trying to take a piece out of the duck, one kilowatt hour at a time.
And finally, an unrelated feature from Wolfram Alpha. The real Duck Curve, which won’t make anyone any money, but it will lose its temper and break all your dishes.