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Effect of PV on spot market prices

The afternoon dip

In Germany, photovoltaics is pulling the price of power on the spot market in the afternoon down into the level of prices in the dead of night. A comparison of last week with mid-March in 2008 shows how great the impact is.

 - The price curve for electricity on the Epex spot market last Wednesday. Source: Epex
The price curve for electricity on the Epex spot market last Wednesday. Source: Epex

Last week, German photovoltaics magazine Photon pointed out in a newsletter what an impact of photovoltaics was having on spot market prices in that sunny week. Since our colleagues at Photon only did so in German, however, we thought we would do them (and you, dear reader) the favor of posting their findings in English here.

As this website shows (also see the chart on the left), power prices peaked last Wednesday at around 65 euros per megawatt-hour just after 9 AM. German power consumption peaks twice a day, roughly between 12 noon and 1 PM and then later in the evening at around 8 PM. The spike in the evening is just barely visible, with prices rising from around 38 euros at 5 PM to 55 euros per megawatt-hour at around 7 PM. But the peak just after noon time is no longer visible at all. By that point, the price of power has dropped even below the price at four in the morning.

 - The price curve four years ago (on March 12, 2008) for a comparison. Source: Epex
The price curve four years ago (on March 12, 2008) for a comparison. Source: Epex

A comparison of the prices four years ago with those of today shows more clearly how vastly things have changed. Back then, prices were the lowest at four in the morning, dropping just below 20 euros per megawatt-hour (see second chart on the left). The two peaks are not clearly visible here either, however, with the price reaching the upper 50s at 8 AM and staying at near that level until 9 PM at night. In other words, there is no dip between the spike in morning demand and the spike in evening demand. But there is a big dip then these days.

At the end of 2011, Germany had some 25 gigawatts of PV installed, and it may have installed as much as two more gigawatts already this year, though no official figures will be available for a few months. Compare that, however, to the installed PV capacity for the chart from 2008 above, when Germany had closer to five gigawatts installed.

But there is one further salient feature in the comparison of the chart from 2012 with the one from 2008. Last week, the spot price did not dip below 35 euros per megawatt-hour, whereas prices started at 20 euros – nearly half as expensive – four years ago. Over a 24-hour period, the price of power on the spot market is indeed lower today than it was back then, but how do we explain the nearly doubling of power in the middle of the night? Given that baseload demand has hardly changed, it must be assumed that power companies are charging more in times of lower demand now that they cannot make their old profits during daylight hours. (Craig Morris)

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5 Comments on "The afternoon dip "

  1. Joachim Falken - 28.05.2012, 22:46 Uhr (Report comment)

    Looks more like an evening price spike recently, e.g. on Sat May 26, 2012, it was reported that PV covered 40% of total consumption during midda and 20% for the whole day in all of Germany. http://www.epexspot.com/en/market-data/auction/chart/auction-chart/2012-05-26/DE (modify date for more examples)

  2. Sven Geier - 29.04.2012, 23:47 Uhr (Report comment)

    When you follow the link, you can tinker with the data yourself a bit. Looks like they picked a rather unusual day in March there, as far as I can tell prices peaked higher on every single other day in March/11 (I may have missed one or something, but the 30-day average is quite different from this particular day). Same for 2008, where the 30-day average for March shows a dip down in price between 15:00 and 18:00 and only picks up afterwards. - not all that different from the 2012 graph, really. (also the price bottom is higher, the load is higher and the peak is higher in 2012, so I'm not entirely sure what to take away from this other than that "PV is sure making a difference").

  3. Mr. Moo - 12.04.2012, 22:50 Uhr (Report comment)

    Natural Gas prices are falling do to the amount of gas discovered via FRACKING. Natural Gas is a glut on the world market right now.

  4. Craig Morris - 13.03.2012, 09:24 Uhr (Report comment)

    Reader, there is certainly some truth to what you write (the shutdown of so many nuclear power plants has created a shortage of baseload power), but that does not explain why, for instance, the price of power was above 40 euros per megawatt-hour on March 10, 2011 – the day before Fukushima. See http://www.epexspot.com/en/market-data/auction/chart/auction-chart/2011-03-10/DE

  5. Reader - 12.03.2012, 19:26 Uhr (Report comment)

    There are less nuclear plants to depress prices. Coal and natural gas prices are also near all time highs.

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