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@ p2p fiat
2023-04-30 15:21:58Renewable electricity production is intermittent by nature - therefore we need to build "excess" capacity to meet demand at all times - as production is not always at 100% of the capacity.
The good news is that capacity is continuously being built.
This now starts resulting in increasingly frequent situations where production exceeds demand - for example today at the time of writing, the PV produces 110% of the Dutch electricity demand. This results in -100 (negative 100) electricity price - and it is not even summer.
As Martien Visser tracks on Twitter.
As such situations will occur more frequently - the investment decision for new electricity production capacity will become increasingly complicated - complicated to calculate, but also complicated to achieve an attractive business case. Indeed, as the frequency of negative prices grows, investing in new capacity becomes increasingly less attractive.
For investment to remain attractive, we will have accelerate the development of electricity storage.
Alternatively, we will have to find ways to consume excess electricity in useful ways - for example produce hydrogen or e-fuel... or mine bitcoin - all of these alternative consumptions of excess electricity could be seen as alternatives for conventional electricity storage.
As excess electricity will be more frequent, the market will likely identify a variety of solutions - and as we can expect that the excess production problem will become increasingly relevant, probably all of the above solutions will have to develop in parallel, depending on the specific circumstances.