The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
In practice, some industrial companies will be able to stop their normal production and make money instead by not consuming the power they would normally use (or by using their backup- typically diesel - generators instead...
But that wouldn't help, would it? Not with negative electricity prices. What you would want to do is store the excess electricity somewhere... like in hydrogen
Or the gain on cancelling existing power contracts is higher than the margin made with that power on their own industrial process (ie the industrial company makes more money selling its rights to power than actually using the power).
the negative price (received by the industrialist for not consuming
Eh, that's a double negative. In what direction does the money move, and in consideration for what?
Obviously, that means the industrialist does not have power in that period, which means that it can either (i) not produce during that period or (ii) use another source of power. The economics of either solution depend on the ability to stop production or not, the marginal cost of the production process (including and excluding electricity) and the availability - and cost - of backup power capacity on site.
The economics further depend on whether the industrialist had hedged or not its power purchases (if it has hedged its purchases, it will get the high spot market price from the counterparty and pay back the agreed fixed price, which can represent significant sums of money and make the interruption of production, or the use of expensive backup, still profitable given the negative payments and the rest)
by gmoke - Aug 14 2 comments
by Oui - Aug 12 8 comments
by Frank Schnittger - Aug 12 8 comments
by Frank Schnittger - Aug 1 20 comments
by Frank Schnittger - Aug 3 4 comments
by Oui - Jul 12 48 comments
by gmoke - Aug 1
by gmoke - Jul 31 3 comments
by Oui - Aug 151 comment
by gmoke - Aug 142 comments
by Frank Schnittger - Aug 128 comments
by Oui - Aug 128 comments
by Oui - Aug 936 comments
by Oui - Aug 716 comments
by Frank Schnittger - Aug 34 comments
by Oui - Aug 31 comment
by Oui - Aug 211 comments
by Frank Schnittger - Aug 120 comments
by gmoke - Aug 1
by gmoke - Jul 313 comments
by Oui - Jul 3016 comments
by Oui - Jul 30
by Oui - Jul 261 comment
by Oui - Jul 253 comments
by Oui - Jul 239 comments
by Oui - Jul 1971 comments
by Oui - Jul 1932 comments
by Oui - Jul 1693 comments