The Netherlands is rapidly improving its energy infrastructure into one that is primarily powered by sustainable sources. This has immense effects on the energy market. Initially, it was projected that it would drive the commodity price down. However, the reality shows us something that this is not the case. This is due to four reasons:
- The weather is unpredictable. This leads to inaccuracies in the production projections of sustainable energy sources. These miscalculations lead to high prices at times of underperformance. This primarily happens in the early morning hours and the evening.
- Reduction in coal-fired power stations. This reduces the available reserve production capabilities. The drop is reserve power leads to extremely high prices once there is a peak consumption without the necessary production.
- Reduction in gas-fired power plants. The gas power plants run less and less hours annually. This led to multiple plants closing their doors due to financial reasons.
- Batteries are very expensive. Currently, there have been developed some techniques that should enable large and affordable batteries. Nonetheless, the expectations are that those will not be able to stabilize the market for at least another 15 years.
Seasonal weather changes also impact the price. Especially in those hours where sun and wind energy production come together. This primarily happens in Q2, around the longest day of the year. This period is marked by very high prices in the afternoon and weekend hours. This is caused by an overproduction of sustainable energy in Germany, the Netherlands and England. This is balanced by France hence their nuclear energy plants are experiencing maintenance. The market is flooded by cheap energy hence France is self-sufficient.
The Netherlands is still ramping up its sustainable production capacity. Our curreny peak demand during the week is around the 17 to 22 GW. Currently, our sustainable production capacity is around the 17 GWh sun and wind energy. The annual growth in sun energy grows with over 40% and wind energy sees a similar growth curve. This growth is primarily caused by the expansions of windmill parks in the North Sea.
All this has adverse effects on the grower its energy exploitation. The grower faces low electricity prices when its demand for CO2 production is the highest and is forced to run its CHP against a negative profit. The deliverance of pure CO2 has been troublesome for some time. It consistently faces failures in the periods where the demand is the highest. On top of this, government subsidiaries make it financially more interesting to store the CO2 in the ground than delivering it to the Dutch horticulture.
The grower requires certainty on the availability of CO2 and is therefore restricted to using the CHP. The CHP can be exploited for CO2 production up to a price of -35 €/MWh. The electricity price can fall to -90 €/MWh in the afternoons and weekends during this period. Therefore, it is important to explore other utilities for the overproduction.
The combination of the CHP with a Mohec provides the grower with a guaranteed compensation for it electricity and enabling the grower to produce affordable CO2. In addition, improving its energy exploitation with up to 25 to 40% emission free heat. This jump forward helps the grower to meet its sustainability goals set by the government. This does however require a different dimensioning of the energy production:
- The CHP needs to run where there is any demand for CO2 production
- Together, the CHP and the Mohec need to cover the total demand for heat in the winter.
- Utilizing underground storage of heat. This model can be optimized by using an underground storage to store the overproduction of the summer which in turn can be utilized in the winter.