Heatwave strains European grid, brings profit to energy storage operators

Record solar power production, backed by yet insufficient energy storage capacity, helped maintain the stability of the electricity system in Europe during the latest heatwave, Ember said. Many nuclear and other thermal power plants reduced their activity as river water temperature wasn’t low enough for efficient cooling. Intraday price spreads at European power exchanges landed a windfall for owners of battery energy storage systems and pumped storage hydropower plants.

The heatwave since late June has caused stress for European power systems, driving electricity demand and doubling daily power prices. Yet grids remained stable, fueled by record volumes of solar, think tank Ember pointed out in a report.

Outside temperatures jumped to more than 40 degrees Celsius, triggering an increase in electricity demand as the use of air conditioners soared. Outages in nuclear and thermal power plants exacerbated the challenges.

Daily electricity demand on July 1 was by up to 6% higher in Germany, 9% in France and 14% in Spain than on June 24. As for peak demand, it jumped by 12% in France, 15% in Spain, and 5% in Germany and Poland.

A bigger electricity price spread within one day means higher income for operators of battery energy storage systems

The average daily price surged 15% in Spain, 106% in Poland, 108% in France and 175% in Germany.

“Despite the huge pressure, European grids passed the stress test, and solar electricity played a major role in keeping them running. The surplus of solar energy during the day helped prevent blackouts. However, the use of energy storage is still insufficient, leading to reduced energy supply after sunset. This translated into a sharp increase in electricity prices,” said Ember’s Europe Programme Director Paweł Czyżak.

Record EU solar generation helps keep power supply stable

June saw the highest solar generation on record in the European Union – 45 TWh, which kept the grid well-supplied during daytime hours. The result was 22% up from one year before.

“Heatwaves will not go away – they will only get more severe in the future. Solutions that can help mitigate their impacts, such as battery storage, interconnection, demand flexibility and dynamic tariffs, should become a key part of grid planning and power market design,” Czyżak added. The biggest opportunity is to store solar electricity, to help power air conditioning well into the evening, he stressed.

Outages limited but still posing concern

The overheating of cables is the likely cause of power outages in Italy on July 1. With rising air and water temperatures, the cooling of thermal power plants becomes more challenging as well. It led to forced reductions in electricity generation from nuclear power plants in France and Switzerland.

The French nuclear fleet has been impacted the most, with all but one of the 18 facilities experiencing some type of capacity reduction. According to the update, up to 15% of the capacity may have been impacted.

A blackout of several hours struck large parts of the Czech Republic including Prague on July 4. However, the authorities only blamed it on a transmission cable in the country’s northwest falling, and the resulting domino effect. Notably, the air temperature was much lower than in previous days.

Sun brings power alongside heat

In the peak days of the heatwave in Germany, solar delivered 50 GW and even more, generating 33% to 39% of Germany’s electricity. The country hosts 14 GW of battery energy storage systems (BESS) and 10 GW of pumped storage, which partly bridged the gap between the peaks of production and consumption.

The rallies in electricity prices in the evenings are getting passed on to consumers, so using air conditioners gets more expensive upon sunset. It is a business case for clean flexibility solutions. Due to a high supply of solar electricity during the day, and a cooling-related demand peak in the late afternoon hours, the daily electricity price spreads skyrocketed.

The spread in Poland in the day-ahead segment almost reached EUR 500 per MWh on July 1. Namely, the daily low was EUR 21.04 per MWh below zero, and the peak amounted to EUR 471 per MWh. In Germany, the benchmark went from EUR 0.16 per MWh in negative territory to EUR 404.91 per MWh.

Storage assets charge at low prices and discharge during peak time, reducing the need for costly imported fossil fuels in the evening, and supporting the balancing of the grid, the analysts underscored.

Interconnection played a role as well. The heatwave peaked in different countries on different days, so interconnectors moved electricity to where it was needed most, dissipating the price peaks in the process.