Heavy winds and plenty of sun coupled with inflexible consumption pushed German wholesale power prices into negative territory for several periods in February this year, triggering a rule in renewables legislation that blocks support payments to offshore wind operators.

According to the so-called “six-hour rule” introduced in a reform of Germany’s Renewable Energies Act (EEG), operators of offshore wind farms commissioned from 2016 on won’t receive feed-in tariffs or market premia they are otherwise entitled to for all periods in which power prices on wholesale spot markets have been in negative territory for six hours or more.

Some 3.5GW of German wind capacity at sea is subject to the six-hour rule, with heavyweights such as Orsted, RWE, EnBW, Iberdrola, Vattenfall and Wpd affected.

Offshore operators (combined) received close to €50m ($54.2m) less in FITs or market premia this February, according to a rough estimate by the association of German offshore wind farm operators (BWO).

BWO managing director Stefan Thimm said the group is lobbying in Berlin to scrap the 6-hour-rule, or at least change the market design to make consumption more flexible at times in which power production from renewables is higher than usual consumption.

The six-hour rule has turned the occasional nuisance of negative prices into a problem for offshore wind operators, causing losses at a time the sector has to struggle with the negative impact of Covid-19.

“Power prices are notoriously difficult to predict. The power market is affected by regulation as no other. Politics define and change goals for CO2-reduction and the expansion of renewable energies permanently,” Thimm told Recharge.

“There is no regulatory framework we can rely on. Estimates are even harder in times of Covid-19 as it is unclear when and how quickly power demand will recover.”

More price volatility is likely in the wake of Covid-19.

Due to the lockdown to contain the spread of Covid-19, electricity demand has plunged in Europe, going down fell 4% in Germany and the Netherlands, 6% in the UK, and 8% in Sweden, utility Vattenfall said at a recent presentation on first quarter results.

Sunny and windy weather at the same time drove up the output of solar and wind energy plants, which in turn pushed down power prices, not only in February, but also for all of the first quarter.

Upcoming dramatic changes to Germany’s energy supply make power price predictions even more difficult. Electricity futures during the period were down between 5% and 16% in the Nordic, German and Dutch markets, Vattenfall said.

Wind

In-the-minus power prices cost Germans offshore wind $54m in a month