liyan Vassilev on Negative Electricity Prices and Renewables: Losses for Producers Will Likely Be Covered Through Subsidies
As yet another wave of enthusiasm builds around solar installations and negative electricity prices — and accordingly, the “panacea ” of batteries — let me remind you of a few basic facts:
The more solar panels we have, the greater the potential imbalance in the energy system. And that imbalance costs money — increasingly more money.
The more negative the prices are, the stronger the so-called “cannibalism ” within the system becomes, especially among solar producers themselves. The reason: they too have fixed costs and loans that need to be repaid.
This was commented on by energy expert and diplomat Iliyan Vassilev through his social media profile.
Since a significant number of “investors ” in solar projects are politically influential figures, get ready for pressure to “rescue ” them. This will mean new subsidies — direct or indirect — aimed at compensating for the losses from negative prices. In the end, the bill will be paid by the consumers or taxpayers. And it will be felt.
Batteries are not a panacea. An exception are pumped-storage hydroelectric plants (PSH), which operate on a meaningful scale. Other types of batteries may eventually cover short-term consumption peaks — and that in some distant future. Their widespread adoption requires enormous financial and resource capacity (which also needs to be secured), as well as time. And there’s always the risk: the technological breakthrough that would make batteries cheaper hasn’t happened yet. You can easily end up drawing the short straw.
And finally: no matter what we do, there are at least 60 days a year when neither solar panels nor batteries can meet the system's needs. For these periods, power capacity is necessary — without it, the system simply can’t function.
Just so you know: super-negative prices on the order of minus 190 BGN/MWh don’t mean you’ll be paying cheaper electricity. On the contrary. System costs will continue to rise — and you’ll be the one paying for them too.
