Renewable Energy Pays German Factories to use Power

During this past holiday weekend, power customers that live in Germany were actually paid to use power. Because of a huge surplus of electricity coming from their wind generators, their electricity costs fell underneath zero – which means they received payments. As it turns out, this is not something that is unusual, as reported in the New York Times. The massive investment that Germany pumped into sources of renewable energy — which is over $200 billion across the last 20 years — has paid off dearly as they tend to enjoy regular excesses of electricity because of the unpredictable nature of solar and wind power.

Germany’s Renewable Energy Sources

Germany received around 35% of all energy from their renewable sources during the year of 2017. And there were some days when that number went as high as 85% which depended on the wind and sun. Over the past holiday weekend, there was a combination of strong winds, low demand, and even warm weather which all combined for a significant power surge.

Germany’s coal and nuclear plants were not able to ratchet down their output fast enough, which led to an excess of around $60 for each megawatt-hour for their high-volume clients like factories.

Who Received The Payments?

Unfortunately, these payments do not trickle down to ordinary households, as utility costs are determined much differently in Germany than in the United States. But their government now is looking at programs for their citizens. They are considering incentives for more power usage at particular times in order to alleviate stress on their massive power grid.

Germany can also export a portion of its excess energy to nearby companies, but they have already withstood price drops under zero more than one hundred times during the year of 2017. With plans to start phasing out the nuclear program by the year 2022, it depends heavily on very reliable weather forecasting to get consistent power creation.

There are actually several European countries, in addition to numerous other countries across the world that also have periodic excess power issues, but the reliance that Germany has on renewable energy sources creates a few challenges that are very unique. At one particular point during the fall, prices fell below zero for an entire 31-hour period. And because of this, their large-scale clients got paid as high as $98 for each megawatt-hour to burn electricity for that period of time.

They are considering to use batteries to help soak up the surplus of power during their peak production. This seems like an obvious answer for their problem, but existing technology is simply not far enough advanced to store the energy they would require. Still, they are adapting to a new world of renewable energy sources. “We now have technology that cannot produce according to the demand, but is producing according to the weather,” claims German energy consultant Tobias Kurth. “It’s one of the key challenges in the whole transition of the energy market to renewable power.”

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