Wprowadzenie do rynku energii

When energy production from renewable sources is high, such as on sunny days or when the wind is strong, the amount of available energy on the market increases. Renewable energy sources have very low marginal costs - which are practically zero, because once a power plant (such as a wind or photovoltaic farm) is installed, the cost of generating additional energy is minimal, consisting mainly of operating and maintenance costs.

In the Merit Order system, which sets the order in which power plants are put on the market based on their marginal costs, the sources with the lowest costs are used first. When renewable energy is plentiful, they bring a large amount of low marginal cost energy to the market, which shifts the supply and demand curve, leading to lower energy prices.

However, this situation can also lead to problems, such as excess energy, which can exceed demand and ultimately lead to negative energy prices, where producers pay to get rid of excess energy. In this article, we detail this solution.

Thus, we understand that the energy market is subject to the laws of supply and demand, and we can conclude:

When gas, coal or uranium prices fall, the marginal costs of power plants fall because lower fuel costs allow (encourage) power units to switch on at lower energy prices and generate positive margins.

• The left side 'pushes' the right side out of the system, i.e., excess RES pushes out gas-fired power plants first then less profitable coal-fired power plants (In the case of excess RES, there may be shutdowns of renewable units to ensure the safety and stability of the system (baseload)).
• If there is a shortage of capacity in the system, the merit order mechanism pushes prices upward to create incentives for gas/coal units to switch on.
• It is worth adding that gas-fired power plants are very 'flexible' sources of power generation and are a very good complement to unstable RES sources. The operation of gas-fired power plants depends on the margins that can be generated (profitability of generation) in relation to the price of gas, the price of CO2 and the price of electricity.  Gas-fired power plants will therefore compete primarily with coal-fired power plants where the profitability calculus of a given source may shift once towards coal-fired power plants, at other times towards gas-fired power plants precisely in relation to the price of coal and gas and CO2 and possible generation margins. More on margins for gas and coal power plants (the so-called Spark Spread or Clean Spark Spread or Dark Spread or Clean Dark Spread) in a separate article.

When energy production from renewable sources is high, such as on sunny days or when the wind is strong, the amount of available energy on the market increases. Renewable energy sources have very low marginal costs - which are practically zero, because once a power plant (such as a wind or photovoltaic farm) is installed, the cost of generating additional energy is minimal, consisting mainly of operating and maintenance costs.

In the Merit Order system, which sets the order in which power plants are put on the market based on their marginal costs, the sources with the lowest costs are used first. When renewable energy is plentiful, they bring a large amount of low marginal cost energy to the market, which shifts the supply and demand curve, leading to lower energy prices.

However, this situation can also lead to problems, such as excess energy, which can exceed demand and ultimately lead to negative energy prices, where producers pay to get rid of excess energy. In this article, we detail this solution.

When energy production from renewable sources is high, such as on sunny days or when the wind is strong, the amount of available energy on the market increases. Renewable energy sources have very low marginal costs - which are practically zero, because once a power plant (such as a wind or photovoltaic farm) is installed, the cost of generating additional energy is minimal, consisting mainly of operating and maintenance costs.

In the Merit Order system, which sets the order in which power plants are put on the market based on their marginal costs, the sources with the lowest costs are used first. When renewable energy is plentiful, they bring a large amount of low marginal cost energy to the market, which shifts the supply and demand curve, leading to lower energy prices.

However, this situation can also lead to problems, such as excess energy, which can exceed demand and ultimately lead to negative energy prices, where producers pay to get rid of excess energy. In this article, we detail this solution.

When energy production from renewable sources is high, such as on sunny days or when the wind is strong, the amount of available energy on the market increases. Renewable energy sources have very low marginal costs - which are practically zero, because once a power plant (such as a wind or photovoltaic farm) is installed, the cost of generating additional energy is minimal, consisting mainly of operating and maintenance costs.

In the Merit Order system, which sets the order in which power plants are put on the market based on their marginal costs, the sources with the lowest costs are used first. When renewable energy is plentiful, they bring a large amount of low marginal cost energy to the market, which shifts the supply and demand curve, leading to lower energy prices.

However, this situation can also lead to problems, such as excess energy, which can exceed demand and ultimately lead to negative energy prices, where producers pay to get rid of excess energy. In this article, we detail this solution.