German Renewable Power and Volatility
According to Montel , the German power market is experiencing increased volatility, after "solar capacity rose roughly 14GW in 2023, 85% more than year before" [ Montel ]. In this blog, we will describe the factors contributing to this volatility and how it will affect the market. The shift to renewable energy is crucial in the battle against global warming. However, the unpredictability of wind and solar power production, can create a mismatch between energy demand and supply, leading to increased price volatility. This is particularly during periods of high demand, such as in low temperatures, at same time as both wind and sunlight are less available. Conversely, during low-demand periods on sunny and windy days, prices decrease, leading to more incidents of negative prices. A study by Tuomas Rintamäki from 2017 concluded that "wind power increases the daily price volatility in Germany". The figure shows the rapidly growth of Wind and Solar power in Germany...