European countries saw power prices in the wholesale energy market dip into negative values last week.
This drop was caused by a combination of the sunnier weather and the large amount of available energy generated by renewable sources. The drop was also marked with a relatively low demand for heating or cooling – a typical consequence caused by springtime temperatures.
Renewable energy such as solar panels were also able to produce more energy during warmer temperatures, since they had better access to direct sunlight.
Negative prices occurred due to an excess in electricity supply that could be caused by renewables such as wind, solar or hydro. These produce a large quantity of electricity that exceeds demands that cannot be stored for later use.
Producers introduced negative prices to incentivise wholesale consumers to take the surplus electricity off the grid and avoid overloading the system.
The weather in the UK is forecast to be dry and settled with plenty of sunshine next week, meaning that there are opportunities to see low or negative prices during the daylight hours.
Our ClearVUE.Business solution
Energy is now being sourced from far more renewables than ever, dismissing ideas that we need to rely on fossil fuels for energy security.
Investment in fossil fuel alternatives, such as renewable energy or emissions reduction platforms, helps reduce our dependence on oil and gas and improve the UK fuel mix.
This is a crucial because its leads to lower energy costs – an urgent priority.
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But how do you capitalise on energy market fluctuations brought on by renewables? That’s where our sister company, NGP comes in. Their energy trading services help businesses navigate the volatile energy market and leverage on energy price dips.
Discover more about our integrated approach to sustainability and energy management here.