Electricity grid in Germany: Oversupply demands urgent solutions!

Electricity grid in Germany: Oversupply demands urgent solutions!

In May 2023, wind farms and solar systems in Germany generated an overproduction of energy that exceeded current needs. This led to more than 120 hours of negative electricity prices on the electricity exchange. In total, 248 hours with negative prices were recorded in 2023. Consumers equipped with smart meters and flexible tariffs were able to benefit from this oversupply and received “free” electricity. This reports n-tv.

Werner Götz, Managing Director of TransnetBW, notes the challenges of oversupply in the energy supply. It emphasizes the need to balance power supply and demand in real time. The clear imbalance is particularly evident on public holidays, when electricity consumption in Germany drops to around 30 gigawatts, while peak consumption of around 80 gigawatts is reached in the winter months. This highlights how overloaded the current infrastructure is and what regulatory adjustments are needed to expand capacity.

Need for investment in battery storage

Overproduction means that electricity has to be sent abroad if necessary or solar systems have to be curtailed. A key key to solving these challenges lies in investing in battery storage. These make it possible to store excess energy and feed it into the grid when prices rise. Loud EY Germany will continue to play a significant role in the field of battery storage systems (BESS) in 2025, supported by political incentives and growing investor interest.

The market in the BESS sector in Germany is divided into various segments. Home storage systems that store less than 30 kWh represent the largest sub-segment. In 2023, they accounted for around 85% of new installations. Its growth rate is expected to be 0.2% in the coming years. Industrial depots and large storage facilities, on the other hand, are showing faster growth, with forecasts of 9% and 31% annual growth rates through 2032. These developments offer enormous investment potential in the areas of manufacturing, services and innovative business models.

Synchronization of grid expansion and renewable energies

Given the high investment requirement of around 300 billion euros for the German electricity grid expansion, it is important that the expansion of renewable energies such as solar energy is synchronized with the grid expansion. Solar energy expansion has already increased under the current government. Nevertheless, says Götz, solutions must be found more quickly to ensure network stability and to counteract future overproduction.

The mechanisms for balancing consumption and production must be optimized, especially in times of light breezes and dark calms. TransnetBW has already concluded 300 contracts with market partners in order to be able to react flexibly to fluctuating production volumes. This adaptability is crucial to successfully mastering the challenges of the energy transition and reducing dependence on fossil fuels.