Electric companies prioritize investment in wind energy to compensate electricity at 0 euros/Mwh due to excess photovoltaic

Large electricity companies are prioritizing investment in wind power over photovoltaic as a way to alleviate the effect that the increase in solar parks in Spain has caused in electricity prices, close to zero euros per megawatt/hour (Mwh). ) or free of charge, during daylight hours, especially in spring and summer. This is seen in the distribution between these two technologies in the renewable parks that Iberdrola, Endesa or Naturgy have in operation and this was made explicit a few days ago by sources from the latter company.

“A photovoltaic plant can give 2,100 hours of production and a wind power plant, from 3,600 to 4,000, depending on the location,” explains Juan Carlos Badillo, an expert in renewable investment, from ATZ Investment Partners, who affirms that what the path that a market of incentives is going on at the moment “is to go towards wind projects”, because they are more profitable. As he says, this is not something that only happens in Spain, but is a worldwide phenomenon.

At the end of 2020, Naturgy's installed wind power capacity in Spain was 1.9 gigawatts (GW), 61% more than in 2018, and a net energy production with this technology of 4,058 GWh. On that same date, the installed capacity of solar energy was 675 Mw, divided between Brazil, Chile and Spain.. Here, the net production was 425 GWh.

Despite being considered the world leader in photovoltaics, the presence of wind energy in the generation of renewables in Iberdrola is greater, both in Spain and in the rest of the countries where it is present. If in the 2022-2024 plan it contemplated installing 3.6 GW of photovoltaic energy and 0.4 GW of wind power, this technology will be the one that will mainly support the 39% boost to renewable generation that the company foresees in the 23-25 plan , when it will moderate the installation of photovoltaic with 3 GW and the wind power will increase by 1.4 GW.

Despite the fact that technically building a photovoltaic park is easier than a wind farm, because it is more complicated in engineering or construction, the most obvious explanation given in the renewable energy sector for companies choosing to invest in more complex projects in Generally more inaccessible places, is that wind turbines allow electricity to be produced at any time of the day, because with more or less force, the wind always blows while photovoltaics only generate electricity during the hours of the day when it is sunny.

The underlying economic reason has to do with the so-called “pointing coefficient”, the result of dividing the average cost of the electricity bill by the average price of electricity, which contains the advantage that electricity companies see in compensate with wind energy the price of electricity that remains close to zero euros during the central hours of the day, when the entry of photovoltaic means that there is a lot of demand and little demand.

According to sources from the renewable sector, it is now perfectly normal that on a spring day the price of electricity is close to zero euros/Mwh in the middle of the day, when photovoltaic generation is at full capacity and pumping a lot of electricity into the system. at a time when the demand, for example domestic, is much lower. Things change when the sun goes down and people go home to prepare dinner or put on the washing machines.. At that time, the renewable asset is wind power, which, as it no longer has competition from solar power at that time, rises in price. “Having electricity at zero euros or 15 euros at certain hours of the day and 100 euros at eight in the evening is totally normal,” they explain.

The very low prices that electricity is reaching due to the large amount available due to the push of photovoltaics has led the wind sector to unsuccessfully ask the Ministry of Ecological Transition for a way to avoid prices equal to zero, which Teresa's department Ribera points out that they would be avoided if the sector resorted to regulated auctions, which set a fixed price for years. Sources from the electricity sector stressed a few days ago that the preference for wind turbines is a way of gaining at hours when there is no light what is not coming in when there is a lot of solar energy.

What happens in general is that if the thing costs a lot of solar competition and makes the price go down, the price billed for the plants at a time when solar production grows and not the demand, makes the price

the pointing,

Yes it is easier to develop and build and operate but it has that problem

an incentive market right now is to go towards wind projects (it is more profitable)

Yes, it completes the curve and it is logical that it will go to wind power

but it's global

Yes, I think there is interest in taking a photo, but not at any price and combining it with hybridization and discussion

market incentive theme

batteries, capacity market, yes there may be a scenario where batteries can enter but it will be an adjustment, yes there may be but it has a pricey incentive

It depends on the cpaic of accident to other technogoacs (perhaps the less prepared companies use the photov because it is more technologically simple)

Despite these low prices…. RESULTS

Declas

-unsuccessfully- to the Ministry of Ecological Transition a

profit sector