When solar and wind produce without storage: Market and grid consequences for industrial consumers

At times, Denmark produces more electricity from solar and wind than is used. That sounds like a pure advantage, and in many ways it is also a strength. But when production from solar and wind cannot be stored or moved, it has concrete consequences for both prices and the grid. For industrial consumers, those consequences are both a challenge and an opportunity.

This article looks at what happens in the market and on the grid when renewable energy is produced without storage. We go a step deeper on the market side than our earlier article on the topic, and we look at why storage becomes relevant at system level, and which choices an industrial consumer has as generation becomes more variable.

Surplus and low prices

The electricity price reflects the balance between supply and demand hour by hour. It is set on the day-ahead market the day before the operating day, where bids from across the Nordic and European market are matched, as Nord Pool describes. When solar and wind produce a lot at the same time as low consumption, there is plenty of electricity, and the price falls. In some periods it can fall all the way to zero or become negative. The number of hours with very low prices has been rising, partly because solar production pushes prices down in the middle of the day, as described in Energinet's Electricity Market Report 2025 (Energinet is Denmark's national transmission system operator).

The scale is significant. In 2024, solar and wind covered a large part of Danish electricity consumption, and in a significant share of the year's hours, production from solar and wind exceeded total consumption, according to Energinet's review of the year 2024. The price of electricity reflects that situation: in surplus hours electricity is cheap, while it is more expensive when solar and wind do not deliver.

Why storage becomes relevant at system level

The problem with surplus is not that there is too much renewable electricity. It is that the electricity must be used or moved in the same moment it is produced, if it cannot be stored. If the surplus can neither be absorbed locally nor carried away through the grid, part of the renewable generation can be downregulated (curtailed, or turned down). Reducing this downregulation is one of the issues Energinet is working on, as set out in the report on security of electricity supply.

This is where storage becomes relevant at system level. A battery can absorb energy in the hours where there is surplus and the price is low, and deliver it again when there is demand and the price is higher. In that way it moves energy in time and makes a larger share of renewable generation usable. The more variable generation becomes, the more value there is in the ability to move energy from surplus hours to deficit hours.

That trend runs in one direction only. As more solar and wind come online, the difference between surplus and deficit hours grows, and so do the price swings. That is why flexibility and storage are not only a current option but a growing part of how an electricity system with a high share of renewable energy will function. For the individual business, that means a tool for handling volatile prices is likely to become more valuable over time, not less.

Industry's choices: consumption, storage and agreements

For an industrial consumer there are essentially three ways to respond to variable generation, and they are not mutually exclusive.

The first is to shift consumption. A business that can place part of its consumption in the hours when electricity is cheap can benefit from the surplus directly. That requires that processes can be moved in time, which is not always possible.

The second is to store. A battery makes it possible to store cheap electricity in surplus hours and use or sell it later, independently of when generation falls. That provides flexibility, including for processes that cannot themselves be moved.

The third is to enter long-term agreements. Through a long-term power purchase agreement (PPA), a business can secure a more stable price over time rather than being fully exposed to the spot market's volatility. The European Commission highlights exactly that kind of agreement as part of a more robust electricity market.

The three paths can be combined, and how much weight each should carry depends on the business's consumption pattern and processes. A business with flexible consumption can put more weight on shifting demand, while one with rigid, continuous processes will more often look to storage or agreements. The point is that variable generation is not only a risk of higher prices in certain hours, but also an opportunity to use the cheap hours if there is a tool for it. Without such a tool, the business is simply a price taker in a market that grows more volatile.

The battery as a buffer

In that context, a battery functions as a buffer between generation and demand. It smooths the difference between when electricity is cheap and plentiful, and when the business needs it. In that way an installation can both reduce sensitivity to price swings and contribute to more of the renewable generation being used rather than downregulated. How large that effect becomes depends on the battery's size relative to consumption and on how consistently price spreads occur across the day, and that is precisely the assessment that should underpin sizing.

The environmental profile that can follow from making better use of surplus electricity belongs to a different pillar, where we treat sustainability in concrete and bounded terms. Here the point is the market one: a battery is a tool for handling variable generation, and for moving energy to where it has value.

The limits of what a battery solves

It is important to be clear about what a battery does not do. A single installation does not change the overall balance between generation and consumption in the system, and it does not remove the need for grid expansion or for other forms of flexibility. What it can do is give the individual business buffer capacity and contribute locally to surplus being used better.

The large, systemic questions about surplus, downregulation and grid capacity are solved through a combination of grid expansion, markets and flexibility across many actors. A battery on a business's own site is one piece in that picture, not the whole solution. We are therefore cautious about presenting an installation as an answer to the system's overall challenge with variable generation.

ZynexGroup's approach to site assessment

We assess how a battery can concretely be used as a buffer at the individual site. That depends on the consumption profile, on when the business uses most electricity, and on how large the price swings are across the day. On that basis we hold a data-led discussion about what an installation can realistically contribute, both to the business's economics and to better use of renewable generation.

Overall perspective

When solar and wind produce without storage, the result is surplus generation, low and at times negative prices, and a risk that renewable generation is downregulated. Storage becomes relevant at system level because it can move energy from surplus hours to the hours where demand and the price are higher. For industrial consumers there are several paths: shift consumption, store, or enter long-term agreements.

The useful point is that a battery can function as a buffer that both dampens price sensitivity and helps use surplus electricity, but that it is a local piece in a larger systemic picture. Value arises when the installation is sized to the business's concrete consumption and to the actual volatility in the market, not from a general expectation that surplus electricity in itself delivers a gain.

Get an assessment of your site's potential

If you want to know how an industrial BESS installation can function as a buffer for your consumption, we start from your own data: grid connection, consumption profile and history. On that basis we produce an initial assessment of whether there is a match, and what the next step could then be. You are welcome to contact us.