Germans are set to receive a very welcome Christmas present: free energy. Wind output is predicted to soar, so prices should be negative as electricity produced by wind power is sent back to the grid. With temperatures about nine degrees Fahrenheit greater than normal, likely reducing demand, it seems the weather is conspiring to make the holidays in Germany a little more festive.
Electricity prices in Germany are predicted to go negative during the holidays, for as little as a few hours to as much as entire days. Bloomberg Intelligence analyst Elchin Mammadov said negative prices are “driven by low power demand during the holiday season when factories are shut, and people go on vacation or visit their families. There are far few outages this year than the same time last year and wind availability is expected to be high.” Further, warmer temperatures mean families likely won’t need to crank up the heat as much.
On December 25, wind generation could spike to 31.3 gigawatts, and could even reach 33.7 gigawatts on December 27. 33.8 gigawatts is the current record, according to Bloomberg, and just one gigawatt can power around two million homes. It can be difficult for grid operators to balance the network with so much wind power, and if prices go negative, producers must close power stations to lower supply or pay users to get that electricity off the grid.
This isn’t the first time German power prices have gone negative. Christmas Eve in 2012 saw prices at minus 56.87 Euros per megawatt-hour; prices also went negative around Christmas in 2013. This year, German electricity prices could dip to minus 10.95 Euros, or around $11.45, per megawatt-hour.