The challenge here is cheap electricity. We can do amazing things with cheap electricity (green steel, green hydrogen, etc), but we are moving backwards on electricity prices. For example, we are seeing large electricity prices increases in Europe.
European electricity still depends on natural gas -- which is largely controlled by Russia in large swaths of Europe. (This is also why Russia might think it can get away with invading Ukraine.)
The cost of electricity once we've transitioned from fossil fuels is ultimately what counts -- and there is a lot of progress being made there, albeit slowly.
Russia's influence, frankly, should be another really big motivator for Europe to transition away from fossil fuels as quickly as possible.
Germany is especially linked to Russian gas for their electricity production, as they shut down all of their nuclear plants in some kind of attempt to be "more green" or something.
Grid prices and cost are two things. EU and US grid pricing is dominated by the most expensive things in the market (gas, coal, and nuclear) because once you use up all the cheap supply, people end up bidding for the expensive stuff. So whenever there's a shortage of that, prices go up.
Burning gas costs money. Shutting down or restarting a gas plant costs money too. And a gas plant that is not running still needs upkeep, maintenance, staffing, etc so it costs money. Some operators actually use negative rates to stimulate demand so they can keep their gas plants running and avoid shutting them down. Negative rates of course cost money, so that is added to the overall grid pricing. None of that has anything to do with the cost of renewables.
That same dynamic is also what makes renewable power very lucrative for operators. A low cost and a high market price just means a lot of profit. That's why world+dog is putting up windmills and solar parks as fast as they can. It's just that good of a deal. And of course the subsidies and positive press help.
If you are consuming a lot of power, that difference means investing in your own power generation makes a lot of sense. Which is why many plans for green steel plants involve plans for e.g. wind turbines and other solutions. So, they only buy from the grid when that supply is inadequate and actually supply to the grid when there is enough supply. Yes that's intermittent. But the connection to the grid isn't and the difference is just cost.
Steel plants sometimes have deals to operate at certain times for load shedding anyway, but how about they use the times when we have an excess of solar/wind and its not well suited to steel production (maybe due to shift patterns) to generate onsite Hydrogen using that excess power? Then they have readily available onsite green hydrogen.
I think things like this will become an absolute necessity soon, using green power at its peaks to store resources for use later. (Obviously batteries will also be essential, although I would rather see gravity storage with big reservoirs like they have in Wales)
Largely the negative prices are a side-effect of feed-in tariffs, where (some) renewable projects get paid a fixed price/kWh regardless of what the actual spot market price is. So when there's an oversupply of these subsidized renewables it pushes the spot price to negative.
I think newer renewable support schemes have been designed to avoid this problem, either by cutting off the feed-in tariff when the spot price goes to zero, or then by restructuring the subsidies as some kind of investment support (state guaranteed very low interest loans or such) rather than paying for the generated electricity.
That of course doesn't change the fundamental issue, in that in a grid with increasing amounts of variable production renewables and the price determined by marginal cost of the most expensive producer, the price swings will be larger than what we previously were used to.
I recently heard that, even in Germany where there is lots of solar, there were only 9 days in the last year where spot prices were negative. Sadly my source is just "someone said".
As for intermittent steel production, from what I know about aluminum it is essentially impossible to turn the process off, because the molten stuff solidifies and is impossible to melt again.
The electricity price is set by the most expensive marginal cost.
This made sense when renewables were more expensive on average than fossil fuels (which we want to discourage) but the rules probably need rewritten now that renewables are cheaper and continuing to get cheaper and fossils relegated to peaked roles.
At the moment it just means that renewable providers are getting a lot of extra cash for not doing anything different and then on occasions when we go 100% renewable the price will crash suddenly to near zero.
Dispatch based on marginal cost makes sense, as that ensures that the lowest marginal cost generators will be used to provide the demand.
But yes, increasing penetration of variable renewable energy like wind and solar will mean that the price will vary wildly. That means that players in the market will need to be hedged to insure them against too high/low prices.
Also it wouldn't surprise me if various capacity market type mechanisms were to become more popular and constitute a bigger share of the money flows in the electricity market as a whole.
Not necessarily. Northern most part of Scandinavia have among the lowest prices for electricity in Northern and Central Europe. Most of the electricity there comes from Hydropower. It's also the same area where Sweden makes it green steel. Cheap and green electricity is not an oxymoron or impossibility.
Traditionally Swedish electricity has been about equal parts nuclear and hydro. Nuclear usually running full out, with hydro used to regulate for daily and seasonal variation.
In recent years they have built a lot of wind, as of 2019 providing 12% of electricity, today almost certainly more. But yes, like you said, hydro is used as the backup for wind.
