From The Age today:
Germany, the world leader in installing renewable energy, had a moment last month. It was producing so much electricity from solar, wind and biomass that more than half of the country’s electricity was flowing from these renewable sources.
There was so much, in fact, that the price of electricity actually fell to zero. And the price kept falling. It went negative. There were times on April 17 when wholesale electricity in Germany was selling for minus 14.91 euros for a megawatt hour. So it wasn’t free – it was cheaper than free.
Now, I’m not overly knowledgeable about economics and that kind of thing, so bare with me here. But is negative pricing for your product not a bad thing? Do the above facts not simply show that on April 17th Germany’s renewable energy plants were simply producing a lot of electricity which has more or less no market value?
I don’t think this is an overly complex point. Yet, occasional negative pricing is put forward as a positive for renewables. Can someone explain to me how it is not a negative?
If a Rome street vendor is standing around the Trevi Fountain trying to hawk umbrellas on a balmy August evening, the fact that tourists aren’t willing to give him a dime for them is not evidence umbrellas are cheap.