EDF, Iberdrola agree to shut down offshore wind farms during negative price periods

EDF, Iberdrola and other operators have signed amendments to power offtake agreements at three French offshore wind farms to allow for the shutdown of all or part of output during periods of negative prices.

The trio, which provide a combined capacity of close to 1.5GW, were tendered early last decade with contracts that provide price support that encourages operators to produce at the wind farms’ maximum capacity, regardless of market conditions.

Wholesale power market prices can turn negative during periods of heavy winds coupled with lots of sunshine for solar farms, especially in France, where a vast nuclear fleet provides baseload capacity.

Due to the mandatory purchase aspects of this scheme, the entire output of wind farms has frequently been sold at the contractual price, and then resold on the market at a negative price, France's economy ministry explained.

The consequence is a drain on public finances and an unbalanced electricity network.

“To limit this phenomenon, the government has held discussions with the producers of the offshore wind farms concerned in order to modify the purchase contracts, allowing the shutdown of the farms during periods of negative prices,” the French economy ministry said in a note.

“Amendments to the contract will lead producers to participate in the adjustment mechanism and to ensure at all times the balance between supply and demand in the electricity system.”

The French economy ministry said the first production stops linked to the application of the new contracts were “successfully” carried out during the weekend of May 10 and 11.

A similar provision had already been introduced for older onshore installations earlier this year.

The government said that through the measures, it is reconciling the development of renewables with the balancing of the electricity system.