Prices are low because of green subsidies?

from article: Europe has experienced negative energy prices several times this year, as the rapid pace of development of solar and wind energy outpaces the region’s ability to cope with excess supply. Electricity prices dropped into negative figures for 7,841 hours during the first eight months of 2024, sometimes to as much as -$22 per megawatt hour, according to the consultancy ICIS. The main culprit has been the solar sector, driven by inconsistencies in the delivery of electricity due to its unstable nature. While the deployment of utility-scale batteries could help to tackle this challenge, this could take several years and countries will have to deal with these price dips in the meantime.

However, as countries increase their renewable energy capacity, they face financial challenges in the transition. Solar and wind energy are highly volatile, producing energy when the sun is shining and the wind is blowing, and not during the night or on still days. This means that on days when wind and solar power generate high levels of electricity, the market can become oversaturated with inexpensive power. This drives down the price of electricity greatly, sometimes to negative figures. Meanwhile, during times of low or no production, no electricity is delivered to the grid, leaving it to rely on other more stable energy sources, such as natural gas.

The EU expects that energy storage will need to increase by more than three times between 2022 and 2030, to match the forecast of a 69 percent renewable energy electricity share by the end of the decade. The rollout of battery storage could be further supported by greater investment in AI-powered smart grids and meters, to better manage energy efficiency for consumers.

To address the issue of negative wind and solar energy pricing, producers must take proactive measures to mitigate the effects of this challenge. This may be done by investing in battery storage or by working with utilities to move consumers from fixed to variable energy contracts, to encourage them to reduce use during low-production hours. This should be supported by stronger national policies on battery storage and clean tech uptake to strengthen electricity grids from governments worldwide.