A record of zero and almost zero prices was recorded in the first quarter of the year – and especially in March – in Greek Stock Exchange energy due to the combination of two factors mainly: the high penetration of renewable energy sources and favorable weather conditions that limit energy demand for heating or air conditioning.
According to the data of the European organization of electricity system operators ENTSO-e, in the first quarter of 2024 Greece had for 33 hours zero or almost zero (below €1/MWh) electricity prices in the day-ahead wholesale market (DAM ), of which 31 hours were in March. In the same period of 2023 this happened for 10 hours, while in the first quarter of 2022 this never happened.
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During these 33 hours of zero or almost zero electricity prices the average share of RES (wind and photovoltaic) in the total electricity production of the interconnected network was 82.2% with a range between 77.9% and 87.5%. In contrast, during the 101 hours in the first quarter of 2024 when the day-ahead electricity price exceeded €120/MWh, the cumulative share of wind and solar was limited to an average of 23.1%.
In addition, according to data transmitted on social networks by the Prime Minister’s energy adviser Nikos Tsafos, characterizing March as a “turning point” for the Greek energy market, strong production from renewable energy sources and mild weather led to several hours of almost zero prices, especially towards the end of the month. “Although the Greek wholesale market had seen such prices before, their frequency far exceeded previous levels. These prices are welcome news for consumers. But it’s also a harbinger of what’s to come, highlighting the increasing complexity of adding more renewables to the grid.”
Reducing energy costs through… RES
“It is now clear that the penetration of RES not only contributes to tackling the climate crisis but also to reducing the cost of electricity for everyone. The fastest possible development of electricity storage networks and infrastructures is of key importance to avoid rejections of production from RES and the further penetration of cheaper power generation technologies”, Nikos Mantzaris, Green Tank’s policy analyst, told APE.
Consumers benefit indirectly from low prices in the wholesale market as retail prices for large tariff categories are derived from the monthly average of prices on the Stock Exchange.
However, there are also secondary effects, for the RES units that participate directly in the market (without a contract that guarantees them payments for the energy they produce) which, in the hours when the prices are zero, have no income. These units are currently a small percentage of the total but the general direction institutionally tends towards the abolition of subsidies and guaranteed prices. For a photovoltaic for example – if it does not have a contract with guaranteed prices – this means that during the midday hours when it shows the maximum of its production, the revenue from the market will be zero. If he has an operating support contract (introduced in 2016) then he will not receive anything, whenever zero prices on the stock market exceed 2 consecutive hours.
Another issue that concerns RES producers is the cuts that occur in production – and by extension in their income – when the demand is not sufficient to absorb all the “green” energy. To reduce these cuts, a more balanced participation of all RES technologies in the energy mix is needed (that is, not almost only photovoltaics from now on, but also more wind). For the same reason, alongside green energy, storage units are being developed which will absorb excess energy when there is a production surplus and prices are low and will deliver it to the grid when there is demand and reduced RES production.
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