Electrification of Demand: When Economy and Environment Face Zero-Cost Electricity

The Selling electricity at zero Euro This year has made a lot of headlines so far, but it wasn't always like that. Prices rose in 2022 due to inflation and the war in Ukraine. Now, between the first 72 days of the year (January 1 and March 13) is already registered Many hours of free light throughout the last year: 108 hours so far in 2024 compared to 109 hours in 2023. However, the experts consulted. Infobay Spain They have confirmed what is there As good as it is for consumers, in the long run, it could be a problem for the industry. Energy majors have been warning for months that this is unsustainable.

Already in September last year, some key managers of energy companies warned of zero price Encourage investments in renewables and value creation. “The current market is not going to work in the short and medium term. Selling electricity for zero euros on some Saturdays and Sundays is unsustainable,” warned the head of Total Energies Electricity and Gas at the VIII Energy Forum. Review of PNIEC Held last September.

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Months later, the sector continues to suffer: the collapse in electricity prices occurs when cheap renewable energies, such as photovoltaics and wind, are capable of meeting the entire national demand for electricity. Since they cannot be stored, otherwise they will be lost, they enter the market at very low prices or, as already seen throughout this year, even at zero. This is a problem for companies because of these prices They cannot afford the expenses.

Therefore, one of the measures to address the economic interests of the sector, in turn, is to protect the environment Electrification is needed to reduce oil and gas consumption. A concept that implies Use only electrical power With the objective of reducing the emission of greenhouse gases.

“If you invest money to install a solar power plant, you should see enough prices to get a reward for that investment. Infobay Spain Marcial González is an industrial electronics engineer specializing in renewable energies. “Ultimately, if we increase consumption and demand, we're also going to create Increase energy market prices“, Collaboration.

To do this, choose to change, for example, the Transportation. “The transportation issue is very clear because it runs mostly on fossil fuels,” he adds. Another way to electrify Integrating heat pipes (aerothermy). “It consists, above all, of replacing diesel boilers, many of which in Spain still have electrified heating systems,” he points out.

Gonzalez further explains that “New industrial needs are going to emerge that will require more power consumption,” like data centers. Currently, data centers are responsible for up to 3% of global electricity consumption, but as the expert points out, one of the reasons they are installed in our country is “our low energy prices.” In the same way, establishing factories, etc The battery gigafactory of the future Lithium ions for electric vehicles from Navalmoral de la Mata in Cáceres province. “Ultimately what they're doing is making our energy more electricity and fossil fuel based,” he points out.

In the same way, Mario Sanchez-Herrerois reassuring Infobay Spain “The whole renewables sector is very concerned” because if demand doesn't pick up, zero-hours electricity prices will continue for “a good part of the year”, which is a risk. “Automatic investment It gets ruined.”

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He is one of the experts advocating this measure as a solution to integrate market price controls with the environmental impact of gas, oil or coal production. “The challenge our country is facing now Use of large number of renewable generation plants, wind and photovoltaic”, he points out. “We want more electricity to be used, not because we're being wasteful, but because we're directly changing the fossil energy vector of oil, coal and gas, turning it into electricity,” he explains.

In fact, power demand is a pending issue for the government. In fact, the National Integrated Energy and Climate Plan (PNIEC) 2023-2030, updated this January with the approval of the European Commission, includes electrification based on a greener outlook as one of its pillars. The document envisages the need to develop renewable energies, especially in the electricity sector, to decarbonise the atmosphere. For this reason, renewable energies are expected to account for 42% of final energy demand and 74% of generation in the power system by 2030.