Electricity price briefly below zero thanks to sun and wind!?

There was a high production of electricity from solar and wind previous weekend (weekend of April 23-24). As expected, there was the usual cheering and celebrating of this event. One of the many was this tweet from a member of the Flemish Green party (translated from Dutch)

Still need arguments for the roll-out of renewable energy?

Electricity price briefly below zero thanks to sun and wind

Tweet WouterDeVriendt 2022-04-25

He links to a newspaper article with the same title and brings forward these negative prices as a decisive argument for more solar and wind: if you weren’t convinced yet, then this surely is the argument that will.

I don’t really agree with that. Those negative prices over the last weekend are not an argument for the roll-out of solar and wind (maybe even the contrary) and it shows his poor understanding of why exactly electricity prices dipped below zero in that weekend.

As mentioned in the title, electricity prices went briefly below zero. Also the subtitle mentioned the temporary nature: electricity prices “went from extremely expensive to below zero and again to very expensive in a few hours”. Even in the case that this dip below zero would have been a good argument, its effect didn’t last very long. Prices stayed generally high, despite this capacity of solar and wind. The reason is that these negative prices are rather volatile and arise in very specific situations.

What periods are we talking about? Let’s look at when those prices dipped below zero on Saturday April 23 and Sunday April 24:

Chart0017: Belgiu, continuous trading prices 2022-04-23 - 2022-04-24

Electricity production by wind was highest in that week (except Sunday night/morning) and solar production did pretty well in that weekend (especially on Sunday). Combined with low demand, this lead to negative prices (especially on Sunday when demand was lowest).

It is therefor no coincidence that these negative prices happen in weekends. Demand is generally low during the weekend, so when there is a lot of electricity produced by solar and wind at that time, this will lead to an overproduction. The resulting situation of high supply and low demand will lower the electricity prices. The greater the difference, the lower the prices. These negative prices are not necessarily a good thing, it indicates that there is an imbalance on the grid.

Another detail that he seem to be missing is what those prices are exactly and who benefits from them. The prices that went negative in that weekend are spot prices, not the household prices. Although his tweet suggests that solar and wind are the answer to the current high electricity prices, it is the energy-intensive industry (buying their electricity directly from the market) that will benefit from these negative prices. The electricity price for the households (his target audience) are still very high, despite the negative spot prices.

This is not the first time that spot prices go below zero in a weekend and in the last years a lot of newspaper articles explained what it is and why it is not necessarily good news, so I am puzzled why the members of the green party keep flogging this dead horse…

via Trust, yet verify


May 1, 2022 at 06:45PM

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