Why businesses should embrace energy price volatility

It is time to embrace energy price volatility?

As our reliance on renewables increases, the intermittent nature of these infinite but less controllable sources of electricity will reshape our relationship with the energy system. 

For business energy users, electricity management has traditionally focused on improving efficiency and reducing consumption to cut costs. However, the increased percentage of renewables in our power mix could encourage organisations to rethink this approach, focusing more on when rather than how much to consume.

As volatility becomes a constant of the electricity wholesale market, and new technologies like EVs put additional strain on the grid, there will be many new opportunities to make savings and create value by participating in system balancing. In some cases, savings will come from shifting consumption to different times of day, or even from using more energy rather than less – as can be the case during instances of negative prices.

Why are negative prices happening more frequently?

During 2020, Europe saw extended spells of negative energy pricing. A study by European power market data analyst EnAppSys showed that in the nine months up to September 2020, European countries on average saw negative ‘day ahead’ prices almost 1% of the time (0.8% on average). During these periods, the markets could not use as much power as was being generated. With supply required to match demand, the wholesale cost of electricity fell below zero. This led to energy users being paid to use more electricity.

As the amount of renewables on the grid increases, we can expect volatility and instances of negative pricing to increase, too. In fact, by the 2030s, we expect energy pricing will be at zero or negative around a third of the time. Businesses without smart electricity management in place will not benefit from this as extensively as they could. However, those with onsite generation assets, battery storage and a smart energy management system (EMS) will reap the rewards.

Negative pricing of electricity during 2020 in Europe

How businesses could benefit from price volatility

Businesses have become used to protecting themselves from marketplace volatility by putting budget certainty above all else – for example by locking prices in place with a fixed rate tariff. Doing so has traditionally provided some stability, but has often meant paying a higher unit price for energy and missing out on the opportunity to cut costs.

Opportunities for businesses with implemented EMS


For organisations that implemented onsite generation, failing to consider market dynamics has also meant missing out on valuable revenue opportunities, such as the possibility to sell excess renewable energy to the grid at peak times.  

With Wattstor’s onsite energy systems, organisations can now fully embrace energy price volatility and make the most of it. We will design, build, pay for, manage and optimise a complete renewable energy system on your premises, selling you the electricity it generates at lower than grid costs. The systems include state-of-the-art battery storage and our smart EMS with predictive AI-based capabilities: Podium. 

With a Wattstor system you have everything you need to reap the benefits of smart electricity management that makes the most of price fluctuations, without the costs and risks traditionally associated with such an investment. 

If you’d like to know more about Wattstor’s onsite renewable energy system, download our guide today.

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