The year 2024 has introduced new challenges to the Polish electricity market, particularly due to the increasing occurrence of negative energy prices. While this phenomenon is not entirely new, it has taken on greater significance this year, affecting the operation of the renewable energy sector and the entire energy system. In this article, we’ll examine the scale of negative energy prices in 2024 and their implications for renewable energy producers and the national power grid.
Causes of negative energy prices in 2024
The main reason for negative energy prices in Poland is the rapid growth in the share of renewable energy sources in the country’s energy mix. In 2024, we saw record increases in the installed capacity of solar and wind energy, leading to periodic energy surpluses, especially during favorable weather conditions.
At the same time, traditional energy sources like coal-fired power plants have limited operational flexibility. They cannot easily adjust their output to match the varying production of renewable sources. Coupled with lower energy demand during certain periods, this leads to energy surpluses within the system.
Instances of negative energy prices in Poland in 2024
In 2024, the occurrence of negative energy prices on the day-ahead market of the Polish Power Exchange (TGE) was significantly more frequent than in previous years. Noteworthy instances were recorded in April, May, and June.
Negative prices persisted for at least six consecutive hours on:
- 14 April 2024 (11:00 AM – 4:00 PM)
- 28 April2024 (11:00 AM – 4:00 PM)
- 1 May 2024 (10:00 AM – 4:00 PM)
- 23 June 2024 (9:00 AM – 4:00 PM)
- 30 June 2024 (10:00 AM – 4:00 PM)(godz. 10:00-16:00)
During these periods, energy prices ranged from -5.57 PLN/MWh to as low as -123.26 PLN/MWh. By comparison, only two such occurrences were recorded in all of 2023.
Impact of negative energy prices on renewable energy producers
Negative energy prices have significant consequences for renewable energy producers, especially those using the certificate of origin system. Under current regulations, certificates of origin are not granted for energy generated during hours when market prices were negative for at least six consecutive hours.
In practice, this means that renewable energy producers need to adjust their applications for certificates of origin by subtracting the volume of energy generated during periods of negative prices. Failure to make these adjustments may result in the Energy Regulatory Office requesting additional documentation, which can delay the certificate issuance process and cause financial losses for producers.
Impact of negative energy prices on the national power grid
The phenomenon of negative energy prices also has broader implications for the entire energy market and the power grid. One of the key challenges is increasing the system’s flexibility. Modular energy storage systems, which can store surplus energy during periods of low demand and release it when needed, are becoming increasingly essential.
Considering the trends in renewable energy development in Poland, it is expected that negative energy prices will become more common. As a result, adjustments in legal regulations and support systems for renewable energy sources are necessary to reflect this new market reality.
Technological innovations will play a crucial role in adapting the system to the variable output of renewable energy. Moreover, demand-side management is gaining importance to better align energy consumption with available supply.
Recommendations for renewable energy producers
In light of the increasing frequency of negative energy prices, renewable energy producers should closely monitor day-ahead market prices. It is essential to implement efficient procedures for adjusting applications for certificates of origin. Producers should also consider risk mitigation strategies such as long-term contracts or participation in the balancing market. Investing in technologies that enhance production flexibility, like energy storage systems, is highly advisable.
The occurrence of negative energy prices in Poland in 2024 has become a key aspect of the country’s energy transition. While it poses challenges for renewable energy producers, it also drives innovation and changes in the functioning of the entire energy sector.
Do you have questions about negative energy prices? Contact Nomad Electric’s experts for professional advice and support in optimizing energy management amidst new market challenges.
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