Power Prices Go Negative in Germany
The article doesn’t actually answer the questions it purports to answer. Better source: <a href="https:&#x2F;&#x2F;www.cleanenergywire.org&#x2F;factsheets&#x2F;why-power-prices-turn-negative" rel="nofollow">https:&#x2F;&#x2F;www.cleanenergywire.org&#x2F;factsheets&#x2F;why-power-prices-...</a>.<p>Energy markets are artificial markets designed to create various price signals that result in certain incentives on both generation and demand, subject to numerous constraints. One constraint is that demand and supply must balance. The grid can’t store much energy. Oversupply can cause grid frequency to go above 50&#x2F;60 Hz, threatening grid stability: <a href="https:&#x2F;&#x2F;www.e-education.psu.edu&#x2F;ebf483&#x2F;node&#x2F;705" rel="nofollow">https:&#x2F;&#x2F;www.e-education.psu.edu&#x2F;ebf483&#x2F;node&#x2F;705</a>. Power prices go negative when there is too much generation capacity online at a given instant, relative to demand. That creates incentives for generators that can shut down (like natural gas) to do so.<p>Negative power prices are not a good thing for consumers. A negative price in the wholesale electric markets does not mean the electricity is &quot;less than free.&quot; Obviously, even wind power or solar always costs positive money to generate in real terms. Instead, it signals a mismatch between generation capacity, storage capacity, and demand. In a grid with adequate storage capacity, negative prices would be extremely rare.