The problem…
During midday hours, when electricity production from Photovoltaics peaks, the Day-Ahead Market (DAM) price often drops to zero. However, this “free” energy never actually reaches the end consumer at zero cost. The culprit lies in the Uplift Accounts (LP2 & LP3), which spike exactly when RES production is high to ensure grid stability.
- LP2: Covers the cost of securing balancing capacity. Since renewables are intermittent, the grid must pay conventional plants to remain on standby.
- LP3: Relates to financial neutrality and redispatching costs. When the grid becomes congested due to excess green energy, expensive balancing actions are required.
This has a direct impact on customers (industries, office buildings and other businesses) that buy electricity during those hours do not pay a zero price, as significant charges are added by the system’s balancing mechanisms which during February ranged between 40 and 80€/ΜWh.
The solution…
The increasing integration of RES into the grid is not a panacea, nor does it eliminate the urgent need for energy efficiency within buildings. True cost reduction and sustainability begin with onsite energy management, regardless of how “cheap” the grid supply appears. There are many energy saving technologies and processes but as starting point and prioritized I want to mention the below :
- Consumption Monitoring: Implementing sophisticated recording platforms allows for real-time identification of energy leaks and inefficiencies.
- Onsite Electricity production: Through rooftop Photovoltaic Systems for Green Energy Production and Storage.
- Heat Recovery: From processes or HVAC aiming to optimal utilization either as Thermal Energy or Electricity (Organic Rankine Cycle).
- Power Quality: Improving the power factor and mitigating harmonics not only protects sensitive equipment but also reduces actual energy consumption.
The conclusion…
A zero-euro wholesale price is often an accounting illusion, masked by high balancing costs that reflect the grid’s structural limitations. The only sustainable strategy for any modern facility is to invest in energy efficiency. By controlling demand and upgrading infrastructure, consumers can remain resilient against the inherent volatility of the current energy transition.
Chrysostomos I. Bouras