FlexiO and negative electricity prices, what about it?

We hear more and more in the media about negative electricity prices, but what does this mean and how will it affect my installation? Can FlexiO offer a solution to this?

Through this blog, we will explain to you what FlexiO can already do for you today and what we are still developing.

A day of FlexiO with negative prices; here we go!

Negative prices, how on earth is that possible?

We are in the midst of energy transition which means more and more solar panels and wind turbines; this is good for the climate but also comes with great challenges. For this we need to briefly dive into how the energy market works.

The energy market works like any other market: the price is determined by supply and demand. The more demand, the higher the price; the more supply, the lower the price.

Electricity demand used to be met by generating power from gas, coal and nuclear. Nuclear power (the cheapest of the 3) provided the base demand. Gas and coal plants were used to meet peak demand. This produced energy was offered on the market to energy suppliers at a market-based price that had to pay for the investment and use of the plants.

This price, also known as the spot price, changed (and still changes) every hour of the day based on the market model of supply and demand combined with the price of electricity production costs. At the beginning of the energy transition, when few solar panels and wind turbines were installed, renewable energy production had little to no impact on its price

.logical, because the investment price in solar panels and wind turbines was very expensive at that time and their share was negligible.

The figure to the right shows an example of the price of energy on a summer day in 2015, just 8 years ago.

The price for power was then cheaper at night than during the day (logical because at night almost only nuclear power was the producer of this power, which has a very low cost price). The market price per kWh of electricity ranged from 0.025€ ( 2.5 cents) to a maximum of 0.055€ ( 5.5 cents).

Now we are only 8 years on, what do we see happening?

Scaling up renewable energy has drastically reduced the investment cost on the one hand. Just look at the price of a solar panel installation now compared to 8 years ago, and on the other hand, a lot of green power is now being produced.

All our solar panels produce electricity at the same time: during the day when there is sunlight. This, of course, shifts the market price of electricity completely and the spot price looks completely different.

In the early afternoon, the price of electricity is at its lowest and thus collapses dramatically. The market price per kWh of electricity now ranges from 0.04€ (4 cents) to as much as 0.15€ (15 cents).

This phenomenon is also described in the energy world as the duck curve, do you recognize the duck in the figure? This figure shows the trend of energy prices over the years.

Now when there is more production than demand, the price of energy has no value; one gets nothing for it because no one can use it.

More to the point, energy producers are going to increase their klan

ten even pay when they start consuming at that time since it is cheaper than turning off a particular power plant (just think of the shutdown and start-up costs of a large power plant or wind turbines that also receive subsidized green certificates).

Recent example: on July 16, 2023, the value of electricity was 0 or negative for 14 hours.

So during this period, you received free power from your energy supplier or were even paid to consume (note, you still pay distribution and other fixed costs such as VAT etc.).

So as a consumer, you can take extra advantage of these market prices if you sign a dynamic contract.

How will FlexiO respond to this?

Let's take a quick look at how FlexiO reacted to these negative prices of July 16, '23. We will use the daily graphs below of an active FlexiO plant for this purpose.

Important to know:

Legend

• The red graph is what is happening on the home's electricity meter. If the line is above the 0 axis, then power is being sent from the home to the grid (it is being injected); if it is below 0 axis, then the home is taking power from the grid (and is being taken from the grid).
• The yellow graph is solar production (above the 0 axis = the plant is producing energy).
• The black line is the consumption of the house, this line is only below the 0 axis since the house itself does not generate energy but can only consume it.
• The green graph is the battery. If the line is above the 0 axis, then current is being drawn from the battery (the battery is discharging); if the graph is below 0 axis, then the battery is drawing energy and the battery is charging.

Installation data

• Inverter battery power: 4.2 kW
• Solar panels power : 8 kWp
• Battery capacity : 20 kWh

What do we see happening?

During the night, the battery will discharge (green line above the x-axis) to cover the home's consumption. Result: the red line is on the 0 axis and nothing is taken from the grid. At the end of the night, the battery is almost empty, only a "strategic reserve" remains stored to cover possible peak consumption in order to control the home's monthly peak at all times.

FlexiO calculates how much solar production is expected and also how much power will be consumed by the home. It does this based on the weather forecast and historical data of the home stored in the algorithm.

FlexiO applies the best model based on these predictions to realize the maximum benefit to the user:

• Until 9:00 a.m. FlexiO is not going to store anything in the battery yet since the price is not very negative yet and FlexiO predicts that more power will be produced than can be stored in the battery.
  
• Starting at 9:00 a.m. FlexiO will store all excess solar production in the battery, but can technically send a maximum of 4.2 kW to the battery because this is the maximum power of the battery inverter. All power greater than this 4.2 kW will be sent to the grid anyway. This is because the PV plant is much larger than the battery plant (7 kW PV plant versus 4.2 kW battery plant).
  
• So during the day you can still see small peaks of the red line rising above the 0 axis because too much power is being produced by the PV plant.

Possible questions the user may ask:

Can't FlexiO still prevent injection into the grid when prices are negative?

Unfortunately, no. Some inverters can be set to produce only the power needed in the home, but this is a fixed setting in the inverter and cannot (yet) be set via external control.

LIFEPOWR does start collaborations with inverter manufacturers to possibly enable this in the future.

So why doesn't FlexiO turn off the inverter when injecting during negative prices?

How does LIFEPOWR see this evolving and how will they align FlexiO with this?

We know that the duck curve will only get worse in the coming years as we are in the midst of the energy transition. It is expected that we are going to double the already installed capacity in just 5 years. The duck curve is then going to change to a canyon curve.

LIFEPOWR sees a number of possible optimizations in the future to anticipate this phenomenon:

1. When negative prices come for extended periods of time, FlexiO will employ the same strategy as today so that the battery is always charged with renewable, free power.
2. We see an extension to heat production: when the maximum inverter power of the battery has already been used to fill the battery and there is still extra power left in the PV system, FlexiO will be able to inform other systems via an API that it is opportune to consume extra (think of controlling a hot water heater, a pool pump, ... )
3. Finally, the inverter could be partially or completely turned off if the inverter manufacturer allows it to be activated via external control.