It explains why currently, even though gas is so prohibitively expensive, we still run gas powered plants at the moment, and also why even with relatively low transmission capacity between countries there is still big impact on energy prices.
The tl;dr is: Energy prices are determined by taking the most expensive auction price that is required to cover the load at any given moment. Everyone who offered a cheaper rate may sell the energy, but receives the highest price that was accepted. This means that prices are highly non-linear and susceptible to supply shocks. Even though the changes from import to export with respect to France are small, a rather small reduction in cheap nuclear power immediately makes it a lot more profitable to produce energy, also making coal and gas viable again.
Also note that this model explains the cheap price of nuclear and solar: You "only" need to ROI your initial capital eventually to turn a profit. When push comes to shove you would rather sell at any price above 0 (or at least a very low bottom) rather than turning off your plant and getting no income at all. You cannot do that when you still have significant operational expenses for fuel (coal, gas, stored water).
On electricitymap you can see this behaviour in action as well. Even with something like 50% solar production, prices remain high, when suddenly, the prices collapse below zero after a certain threshold was reached.
Also note that in these cases, the prices in France and Germany decouple. Customers on the German energy exchange might get paid to use energy while in France spot price still is upward of 10-20 ct/kWh.
Also:
> Under European market law, you are obliged to buy renewable energy if it is available.
Do you have a source for that? I think that guarantee only applies to Germany. And then it only says that the suppliers always get paid for the energy they could produce, wind and solar can and will still get turned off physically.
And from what I have written above it pretty much follows that renewables will always be bought if possible, because they have no fuel costs and letting them run is during positive prices always more profitable than shutting them off.
Note though that many renewables are not even sold on the energy exchange and rather influence the market indirectly as most energy utilities have fixed delivery contracts with the producers and only buy/sell the excess on the spot market.
It explains why currently, even though gas is so prohibitively expensive, we still run gas powered plants at the moment, and also why even with relatively low transmission capacity between countries there is still big impact on energy prices.
The tl;dr is: Energy prices are determined by taking the most expensive auction price that is required to cover the load at any given moment. Everyone who offered a cheaper rate may sell the energy, but receives the highest price that was accepted. This means that prices are highly non-linear and susceptible to supply shocks. Even though the changes from import to export with respect to France are small, a rather small reduction in cheap nuclear power immediately makes it a lot more profitable to produce energy, also making coal and gas viable again.
Also note that this model explains the cheap price of nuclear and solar: You "only" need to ROI your initial capital eventually to turn a profit. When push comes to shove you would rather sell at any price above 0 (or at least a very low bottom) rather than turning off your plant and getting no income at all. You cannot do that when you still have significant operational expenses for fuel (coal, gas, stored water).
On electricitymap you can see this behaviour in action as well. Even with something like 50% solar production, prices remain high, when suddenly, the prices collapse below zero after a certain threshold was reached. Also note that in these cases, the prices in France and Germany decouple. Customers on the German energy exchange might get paid to use energy while in France spot price still is upward of 10-20 ct/kWh.
Also:
> Under European market law, you are obliged to buy renewable energy if it is available.
Do you have a source for that? I think that guarantee only applies to Germany. And then it only says that the suppliers always get paid for the energy they could produce, wind and solar can and will still get turned off physically.
And from what I have written above it pretty much follows that renewables will always be bought if possible, because they have no fuel costs and letting them run is during positive prices always more profitable than shutting them off. Note though that many renewables are not even sold on the energy exchange and rather influence the market indirectly as most energy utilities have fixed delivery contracts with the producers and only buy/sell the excess on the spot market.