The New York Times published a very interesting article Monday stating that because of Germany’s massive investment in renewables, negative pricing has resulted which is pitched as a net positive for Germany’s consumers. In short, German consumers were basically paid to use energy over the weekend.
The Grey Lady claims that negative prices result from when the power supply outstrips the demand. However, The Times does later that Germany’s energy supply is less predictable than it used to be, German consumers do not directly benefit from negative prices and that enough wind and solar is available to meet demand.
But are negative energy prices resulting from renewable use a net positive for consumers as article claims? Not quite. Energy prices from renewable sources go negative due to market shortcomings, not from gains in efficiency. Like The New York Times article goes on to point out, wind and solar are not just intermittent, they are also unpredictable.
Meaning the power supply constantly fluctuates which results in power gluts that can’t be saved due to a lack of battery capacity. When oversupply of power occurs, utility companies are then forced to choose between closing conventional power plants or dumping the surplus on the market. This is what is meant by paying consumers to use energy.
Small wonder that, despite the constant case being made in the mainstream media and among certain intellectuals, that, like the rest of Europe, Germany is poised to sack using renewables while still relying on coal-fired power plants as backup when not enough wind or solar power is generated.
Despite government largess being rewarded to subsidized industries (like renewables), they are not immune from market pressures be it prices or other forms of energy changing in price. Fortunately, this has made renewables not only politically unpopular, but now there is the potential wind and solar companies will be out of business due to their blatant inefficiencies.
In the case of The New York Times, what was a news report to make a positive case for renewables later reveals that their negatives far outweigh their positives after all.