Nicosia negative electricity price energy storage

What is a negative electricity price?

Electricity has a different price every hour of the day — what we call the spot price. When production surpasses consumption, instead of charging consumers for power, electricity generators must pay the grid operator to deliver their electricity or otherwise halt production. Negative prices are closely linked to renewable energy generation.

What causes negative energy prices?

Negative prices are closely linked to renewable energy generation. On particularly windy or sunny days, clean power plants may generate more energy than average, which — lacking sufficient storage capacity — must be dispatched to the grid. This surge in production can sink prices below zero.

How do negative electricity prices affect electricity prices in Nordic countries?

“The impact of negative prices in Nordic areas is lower, given the nature of price setting in hydro-dominated price zones and the ability of reservoirs to dampen the most extreme negative hours,” says Katinka Bogaard, managing director at Volt Power Analytics, who run a comprehensive model of electricity prices across Europe.

Are negative electricity prices increasing in 2024?

In 2024, Europe recorded an unprecedented number of negative hourly electricity prices. As renewable energy deployment accelerates, this trend will continue to increase, along with the significance of Power Purchase Agreements (PPAs) in building new clean energy capacity. What are negative electricity prices?

Are electricity prices negative in the EU?

According to Montel, electricity prices in the EU were negative for a record number of hours in 2024, with Finland experiencing the most negative hourly prices for the second consecutive year. As renewable electricity generation increases, we can expect more negative hourly prices in the future.

How will negative hourly prices affect the energy industry?

At the same time, the growing prevalence of negative hourly prices may accelerate investment in storage technologies and grid flexibility. Energy carriers, such as green hydrogen, could also benefit from surplus renewable energy production, advancing the decarbonisation of hard-to-electrify sectors.