The year 2024 will not only have been the second hottest on record. It also marks a turning point in Europe’s energy transition. The signal was given by the spot electricity markets. In the second quarter of 2024, 4,166 hours were recorded at negative prices, including 1,573 in May. This is 189% more than over the same period in 2023, indicates the European Commission. These negative hourly prices occur when electricity demand is lower than expected and variable renewable energy production, coal and nuclear, is abundant. Conventional power plants then offer their production at a negative price in order to avoid shutting down and risking a costly restart. If most of these episodes of negative prices occur in Northern and Central Europe, France is not spared.
While the number of hours at negative prices had never represented more than 102 per year until 2022, or 1.2% of the time, it reached 147 hours in 2023 (1.7% of the time) and 235 hours for the first half of 2024 alone (5.4% of the time), observes the Energy Regulatory Commission (CRE). These hours are mainly in the early afternoon and on weekends, when electricity demand is lowest and renewable energy production, particularly solar, is highest. If these negative prices may appear to be “a good thing for consumers”, indicates an electricity market expert, they cannot be established over time. They are indeed costly to the taxpayer. Renewable energy (RE) producers with additional remuneration, who are contractually encouraged to stop, are compensated for not having been able to produce. In France, in the first half of 2024, this cost the State 80 million euros. Producers under purchase obligations are insensitive to market conditions and produce unused electricity at all costs.
Shift off-peak hours
These negative prices are in fact the signal, not of a malfunction of the physical networks, reminds the CRE, but of a need for additional flexibility mechanisms. “The continued development of renewable energy, without certain adaptations to support systems or without the development of additional flexibilities, could lead to an increase in the phenomenon of negative hours in the coming years,” warns the CRE. At the European level, the Commission is also calling for the development of interconnections between countries, electricity storage solutions and also to act on demand to cope.
The CRE is working on it. In May, it proposed that off-peak hours be shifted between 11 a.m. and 5 p.m. from April to October, to correspond to periods of maximum photovoltaic production and where the risk of negative prices is highest, ideally from 2025. Then charge to suppliers to educate their customers and offer attractive offers. While waiting for the development of electric vehicles, whose batteries promise to be another source of flexibility on the network.
Review purchase obligation contracts
However, shifting off-peak hours will not be enough. We should also act on supply. In November, the CRE made 10 proposals aimed at reviewing the support mechanisms for renewables. In particular, it wishes to amend the purchase obligation contracts already signed to introduce incentives for the shutdown of installations during periods of negative prices, reduce the number of new contracts of this type, and also modify the supplementary contracts. of remuneration. It is up to producers to invest in storage solutions to adapt supply to demand. But unlike Germany or the United Kingdom, in France no aid mechanism is provided for storage backed by renewables. The approximately 800 MW of batteries installed, notably on TotalEnergies sites, are essentially dedicated to balancing the network.
Give battery storage a framework
If the CRE also consulted at the beginning of 2024 on the possibility of introducing new withdrawal/injection pricing for batteries, no battery storage objective is currently planned in the 2025-2035 multi-annual energy program. No problem, “we don’t need PPE 3 to talk about it to do it,” explains Mathieu Massagne, CEO of ZE Energy. The latter is developing solar power plants plus storage, to save on network connection costs or to install where Enedis stations are saturated. During episodes of negative prices, he was able to move his injection times while still being compensated. He nevertheless recognizes that this system is not sustainable, and that we now need a stable framework for battery storage rather than “pulling cables between countries”, as recommended by the European Commission or organizing ” the capping of renewable production which remains a waste”, as France is beginning to be forced to do.
Prepare for 85% renewables
To achieve carbon neutrality in 2050, Europe must achieve 60% low-carbon electricity in the mix. Renewables should represent 85% of electricity production in Europe and 68% in France, with the construction of 14 EPRs, according to Engie. To integrate these renewables, the flexibility capacities on European energy networks will have to be multiplied by 4.5. A third of this flexibility would come from battery storage systems and the modulation of production assets. The rest would come from the elimination of industry or the production of renewable hydrogen by electrolysers, but also from managing demand, using the batteries of electric vehicles and moving consumption times. TotalEnergies is preparing for this. He invested 10 million in a hybrid wind, solar and storage pilot plant at the Technical University of Denmark to learn how to bring energy to the grid at the right time and in the right quantity.
Source: www.usinenouvelle.com
