News date: 28.06.2024.
Negative electricity prices on the CROPEX stock exchange: A challenge for photovoltaic power plants
Lately, we have witnessed the appearance of negative electricity prices on the CROPEX stock exchange. This phenomenon, although unusual at first glance, has its roots in the specifics of the market and the characteristics of electricity production and consumption.
Trading on the stock exchange
CROPEX – Croatian electricity exchange
At CROPEX, prices are formed based on supply and demand, which ensures a fair and market-based value of electricity. The exchange also plays a key role in the integration of renewable energy sources into the power system, enabling flexible management of production and consumption.
A DAY AHEAD MARKET
Trading on the Day-ahead market is carried out through a central auction that is held every day for the next day’s delivery of electricity, and the single price rule is used to calculate the market price.
According to this rule, the price is determined on the basis of all purchase and sale orders received by the members of the stock exchange in such a way that a summary supply curve and a summary demand curve are formed based on them for each trading hour. The intersection of these curves represents the market price, and in each trading hour, exchange members whose orders are accepted trade electricity at the same single price.
Why are prices negative?
Negative electricity prices most often occur in periods when the supply of electricity is significantly higher than the demand. This usually happens during the night hours or on weekends, when electricity consumption is low and production from renewable sources such as wind and solar can be high. In such situations, producers are willing to pay for someone to take over the excess energy to avoid the high costs of stopping and restarting their plants.
Unlike other forms of generation, PV plants have the advantage of not having the costs of stopping and restarting. This makes them more flexible in situations when electricity prices are negative, enabling a quick reaction to market conditions. During a period of negative market prices, photovoltaic power plants can temporarily stop their production, which avoids the costs of the power plant associated with negative prices.
The company Tesla d.o.o. offers solutions that further optimize the management of photovoltaic power plants. Our automation systems enable efficient shutdown of production and restart of power plant production in accordance with the situation on the CROPEX – Day-ahead market (DAM), which avoids losses and ensures sustainable business.
For more information about our solutions and how we can help you optimize your electricity production, please feel free to contact us.