An article by Giles Parkinson in The Guardian on 7 July reported that the wholesale price of electricity in Queensland fell into negative territory – in the middle of the day. Apparently this has never happened in the middle of the day before. Here’s part of what the article reported:
For several days the price, normally around $40-$50 a megawatt hour, hovered in and around zero. Prices were deflated throughout the week, largely because of the influence of one of the newest, biggest power stations in the state – rooftop solar.
“Negative pricing” moves, as they are known, are not uncommon. But they are only supposed to happen at night, when most of the population is mostly asleep, demand is down, and operators of coal fired generators are reluctant to switch off. So they pay others to pick up their output.
That’s not supposed to happen at lunchtime. Daytime prices are supposed to reflect higher demand, when people are awake, office building are in use, factories are in production. That’s when fossil fuel generators would normally be making most of their money.
The influx of rooftop solar has turned this model on its head. There is 1,100MW of it on more than 350,000 buildings in Queensland alone (3,400MW on 1.2m buildings across the country). It is producing electricity just at the time that coal generators used to make hay (while the sun shines).
Yes, the wholesale price level around zero was due to the level of installation of rooftop solar PV systems by homeowners and businesses in Queensland. But in reality it seems to me that the near zero pricecould more accurately be said to be due to the removal by the Queensland government of most of the feed-in tariff paid to solar PV producers – BUT … there are still lots of solar PV owners on fixed term contracts and receiving reasonably high feed-in tariffs – so shouldn’t these tariffs have been reflected in the wholesale price when solar PV was dominating the market? Or are there now so many recent solar PV installations that their low feed-in tariffs are dominating the market around the middle of the day?
Can anyone enlighten me as to how the near zero wholesale electricity price really came about?
Regardless of the confusion, it seems that solar PV is making its mark as a component of the State’s energy generation industry. Are these low wholesale prices eventually going to be reflected in our electricity bills?
You can read the whole Guardian online article here.