Electricity Prices Turn Negative as Renewable Energy Production Increases

Electricity Prices Turn Negative as Renewable Energy Production Increases

It is not possible to attach a silver lining to the devastation and hardship wrought by the new novel coronavirus. What we can — and should — do, however, is take lessons from it wherever we can. Turning a critical eye on the ways in which we treat our health, our modern lifestyles, and the planet itself, will help us to move forward into a better and more sustainable future.

Countless flights have been suspended, journeys made unnecessary, production lines halted, and warehouses closed. The effects, however temporary, have been so great that a notable improvement in air quality and pollution was detected in places as far afield as Beijing, Los Angeles, London and Nairobi just weeks after lockdown efforts took effect.

In part, this was a direct result of a marked change in our consumption of fossil fuels. With so many industries working at limited capacity, electricity usage has dropped and renewable energy has been given an opportunity to take the reins which has, in turn, shed light on an ongoing revolution within the energy sector: with the increasing capacity for renewable energy, wholesale energy prices have entered into negative periods, meaning that some energy providers were forced to pay their customers to consume energy.

Why Have Energy Prices Turned Negative?

If you rely on powering your home from the grid, then the notion of being paid to consume electricity will seem more like a utopian fantasy than a reality, and yet over the May bank holiday weekend electric car owners were able to make as much as £5 from supplier Octopus Energy in exchange for recharging the car’s battery with surplus power.

The simple answer to negative prices is this: the UK’s capacity for renewable energy is more than capable of matching our current, limited energy usage.

Solar panels, for instance, are capable of continuing to produce energy even in subpar weather, but the extra sunshine we have been seeing over the past fortnight has meant that solar systems are feeding the grid at an incredibly efficient rate. And, as more of us aim to make the most of the good weather and spend more time outside in the garden, the demand upon the grid is incredibly low.

And while negative energy prices may have become more regular during the Covid-19 outbreak, it is not a total anomaly. In March of 2019, for example, a six-hour period of negative wholesale energy prices was hailed as ‘unprecedented’ — in the following months, we continued to see more instances of this phenomenon.

We should look on Covid-19 as a catalyst for a reaction that was already happening with increasing frequency throughout the UK, and understand that this signifies a permanent change within the energy sector.

Making Use of Negative Prices with Battery Storage Systems

Many homeowners are now making the decision to install at-home battery storage systems, which can be charged during periods of negative energy costs, and used to power the home during peak hours when energy prices reach their highest.

In doing this, homeowners can take full advantage of adaptive energy tariffs, such as the Octopus Agile Tariff, which notify its users of the following day’s wholesale energy prices, allowing them to adapt their energy usage and take full advantage of reverse energy costs

In one year, Octopus recorded energy prices below 2p / kWh 31 times, and with a battery storage system these savings can be capitalised on during peak hours, when energy use is at its highest, and energy prices rise to reflect the surge in demand.

Similarly, those who own electric or hybrid vehicles can take advantage of the reverse charge tariff by charging their battery during periods of ‘Plunge Pricing’, when they can be paid to take energy off the grid.

Health and Wellbeing

A number of recent studies into the proliferation and severity of Covid-19 cases have found a noteworthy link between areas that are subjected to higher levels of air pollution, and those with higher death rates as a result of the virus. Of course, prior to the current pandemic, increased exposure to air pollution has already been shown to increase the risk of death from all causes but, when it comes to Covid-19, the risk is 20 times higher.

Air pollution presents an unremitting threat to our health, and the WHO has revealed that it is responsible for a third of deaths caused by stroke, lung cancer, and heart disease. While we are all able to avoid the damaging effects of smoking cigarettes, none of us can avoid air that has been saturated with pollutants, though the ramifications for our health are the same. 

Now more than ever before, the importance of building and maintaining a safe and healthy world lies in stark contrast to the current state of our lives. Covid-19 offers a harrowing look into a future of dissonance; the rapid escalation of a struggle between modern life and natural law.  It should not be inherently dangerous for us to breathe the air outside of our homes, and yet, in areas with exceedingly high levels of particle pollution, wearing protective face masks was becoming the norm long before the outbreak of this new strain of coronavirus.

While we are all able to take heart in the knowledge that the current lockdown measures are significantly improving air quality, this progress is only temporary. Much of this crisis remains out of our hands, but it is our responsibility to adopt practices that promote our continued health and wellbeing. Social distancing and investing in sustainable practices may seem disparate, but they both pave the way for a healthier, more viable future.

Is This a Step in the Right Direction for Renewable Energy?

Any opportunity to limit the consumption of fossil fuels is a step in the right direction, but the recent instances of negative energy prices and increased renewable energy usage are unlikely to remain consistent without worldwide commitment. In a statement released last week, Nada Osseiran, communications officer at The World Health Organisation, wrote that:

 “Accelerating the pace of progress in all regions and sectors will require stronger political commitment, long-term energy planning, increased public and private financing, and adequate policy and fiscal incentives to spur faster deployment of new technologies.”

The UK has an ambitious target of reaching net-zero greenhouse emissions by 2050, but progress has been interrupted, and attempts have been deemed inefficient by experts. As a result, the prime minister faces mounting pressure to ensure a green recovery in addition to economic recovery in the wake of Covid-19.

Why is Now Such a Good Time to Choose Solar Installation?

Despite various government targets toward sustainability, a future led by renewable solar panels and other renewable energy sources remains all too distant. As the world begins to instate a ‘new normal’, industries will pick up where they left off, and energy demand will once again sky rocket.

The trouble with this mass movement toward normalcy is that it does not take into account the lessons that 2020 has brought to us: that we are not living in a way that can survive or persist through catastrophe. In some ways, Covid-19 has given us only a small taste of the future — further catastrophes for which we are unprepared. Despite growing awareness around global warming, and the countless dangers it poses to our health, many are likely to put profit over adaptation, and continue to move forward without first checking what is really on the horizon.

Choosing solar installation for your home or business will ensure that you will not be reliant on fossil fuels when demand resurges. This means that you will no longer be subject to shifting electricity prices each month, and instead able to use power at no cost to you.

While recent reports on negative energy prices have been encouraging, they demonstrate the turbulent nature of the energy industry. Prices reflect demand, and demand has reached an unprecedented low this year — but it will not stay that way. Many of us, at some point or another, have known the difficulty of paying an energy bill during times of financial hardship, and in the face of an uncertain economic future, distancing ourselves from this industry is one of the wisest investments we can make. 

Exporting Solar Energy to the National Grid

Homeowners using solar panels are also entitled to the Smart Export Guarantee (SEG), which requires all energy providers with a customer-base of more than 150,000 to pay for excess energy fed into the national grid by small-scale solar systems. While there is no rule pertaining to the amount offered by energy companies, it must always remain above zero — even when energy prices turn negative.

The tariff is set at pence per kilowatt hour (p/kWh), and you will be able to keep track of how much you are exporting back into the national grid through your home’s Smart Meter.

Solar EV Charging

Owning an electric car is an excellent way of distancing yourself from the volatile price wars over petrol and diesel, and knowing that you are no longer contributing to the devastating build-up of pollutants, such as nitrous oxides and carbon monoxide, in our atmosphere.

As an electric car owner, you will likely be aware of the financial benefits to powering your car on electricity — the RAC shows the average driver currently spends somewhere in the region of £60 on filling up on petrol, in addition to the other costs associated with maintaining and insuring a car. By comparison, PodPoint has estimated that the average at-home charge for an EV costs around £8.40 for a home powered by energy from the grid.

Having a solar installation within your home or business will also allow for solar EV charging; excess energy produced throughout the day can be stored and used to recharge your battery at no cost, and using only renewable, clean and free energy from the sun.

There are grants available for the installation of both commercial and domestic solar EV charging ports. The WCS (Workplace Charging Scheme) offers government support towards the costs of purchasing and installing solar EV charging points, just as the EVHS (Electric Vehicle Homecharge Scheme) is able to offer homeowners a grant towards the purchase and installation of up to two solar EV charge points.

Choosing to Prioritise a Green Recovery

Over the past months, we have been handed an opportunity to glimpse a future lead by clean, sustainable energy; at the same time, efforts to increase the UK’s capacity for renewable energy have been an unfortunate victim of the necessity for a country-wide lockdown.

Fortunately, we have not lost momentum entirely, and continuing into a ‘new normal’ with lowered emissions and sustainable practices as a priority is not only possible, but essential. Now more than ever, we are all aware of the toll global crisis can take on our health, quality of life, and the economy at large, and another opportunity to restart normal life with a firm commitment to protecting the earth — and, by extension, ourselves — may not come in time to ensure a cleaner, healthier and more stable future for us all.


Atlantic Renewables

Atlantic Renewables are a solar PV design and installation company, providing affordable solutions in Manchester, Cheshire and throughout the North West.