What are negative electricity prices?
Negative electricity prices arise when electricity is traded on the wholesale market at a price below €0/MWh. A negative market price means that sellers on the spot market in question receive a negative price, in accounting terms, for the volume of electricity they sell. The economic consequences this has for plant operators or marketers depend on the specific contract, support scheme and marketing structure.
Negative electricity prices at a glance
- Negative electricity prices arise when electricity is traded on the wholesale market at a price below €0/MWh.
- An EMS cannot prevent negative electricity prices and is no substitute for an economic marketing decision. It technically implements the specified strategy within the plant on the basis of available price, schedule or setpoint data.
- Not every plant can respond effectively to negative electricity prices. Without storage, flexible loads or controllable feed-in, the scope for action remains limited; furthermore, grid connection conditions, the remuneration model, direct marketing contracts or technical certifications may restrict the permissible mode of operation.
- EcoPhi is neither an electricity trader nor a direct marketer, but rather forms the local technical control and communication layer within the customer’s plant.
How do negative electricity prices arise?
Negative electricity prices are usually caused by a short-term imbalance between high generation and low demand. They frequently occur during periods of high PV or wind feed-in, low consumption and limited system flexibility.
These prices can affect the economic operation of PV systems, BESS and C&I sites. An EMS helps coordinate generation, storage and consumption in response to negative price signals.
Negative electricity prices arise when electricity supply exceeds demand. The surplus cannot be sufficiently stored, exported, consumed flexibly or curtailed. The market price may then fall below 0 €/MWh. This happens when individual market participants are willing to accept a negative price for the electricity they sell.
Not every generation plant can be shut down quickly or economically. Meanwhile, PV and wind generation may remain high despite low consumption. Limited grid capacity, restricted export options and a lack of flexible loads can further contribute to the surplus.
For directly marketed plants, negative prices are an important economic signal. The appropriate response depends on the marketing contract, subsidy model, plant design and technical operating limits.
How Does an EMS Respond to Negative Electricity Prices?
Depending on the project, the plant operator, direct marketer or a higher-level optimisation system defines the marketing strategy. The EMS implements this strategy within the plant. It also monitors compliance with the defined limits.
The EMS first receives external price data, schedules or setpoints. In parallel, it records local measurements. These include PV generation, grid import and export, site consumption, BESS power and SOC. The EMS then checks technical and operational limits. These include grid connection and feed-in limits, charging and discharging power, and SOC limits. It also checks device status, communication availability and consumer priorities.
Based on this information, the EMS calculates a permissible local setpoint. Alternatively, it adjusts an external setpoint within the permitted limits. It sends the setpoint to PV inverters, BESS or controllable loads. The EMS then uses component feedback and measurements to monitor the actual response. If deviations occur, it makes corrective adjustments or reports a defined fault condition.
Where do negative electricity prices have practical relevance?
Negative electricity prices are particularly relevant for PV systems under direct marketing arrangements, as feeding electricity into the grid during these periods can be economically disadvantageous. Depending on the tariff model, contract and technical setup, it may be advisable to reduce feed-in, consume the electricity locally or charge a BESS.
In PV and BESS projects, an EMS can be used to store surplus electricity within defined limits rather than feeding it directly into the grid. This allows the storage system to be used later for self-consumption, peak shaving, meeting load profiles or other operational strategies.
In C&I applications, negative electricity prices can be utilised to specifically shift flexible loads to cheaper time slots. These include, for example, charging infrastructure, thermal processes, refrigeration systems, heat pumps, pumps or other loads whose operation can be postponed for a limited period.
Negative electricity prices are also relevant for co-location projects involving PV, BESS and grid connection. In such situations, a BESS can charge in a targeted manner, provided that grid connection, storage limits, marketing strategy and regulatory requirements permit this.
Another use case is the technical implementation of direct marketing requirements. The EMS receives schedules, price signals or setpoints and implements these locally by controlling PV inverters, BESS or flexible loads accordingly.
What are the benefits of a technical response – and what are its limitations?
Negative electricity prices create an economic incentive to operate generation, storage and consumption in a more flexible manner. Whether feed-in should be reduced, energy stored or a load activated also depends on the local grid situation, the trading contract and the technical operating limits.
The benefit of a technical response lies in better aligning plant operation within the permissible limits with market and plant conditions. This allows existing flexibility to be utilised in a more targeted manner and helps to minimise economic disadvantages.
The technical integration of various direct marketers can be achieved via documented interfaces. The plant operator decides which direct marketer to use; the contract, marketing model and technical specifications are project-specific.
How can price-based control be implemented using EcoPhi?
EcoPhi can be used as a local EMS layer to technically implement price-based operating strategies within a plant. To this end, local measurement values are combined with external price, schedule or setpoint data.
Depending on the project, EcoPhi can receive specifications from a direct marketer, an energy trading or optimisation system, or another higher-level platform, and translate these into valid control commands for the connected components.
In doing so, EcoPhi takes into account, amongst other things, limit values at the grid connection point, SOC and power limits, consumer priorities, device status and communication availability.
The choice of direct marketer is at the discretion of the plant operator. EcoPhi has already established technical connections with various direct marketers and can integrate further ones on a project-specific basis, provided the necessary interfaces, data points and control logic are available.
In principle, EcoPhi can also implement price-based control strategies in projects across various EU countries. This requires the availability of market data or external setpoints, compatible interfaces, controllable system components, and compliance with the relevant regulatory and contractual framework conditions.
Summary
Negative electricity prices arise when electricity is traded on the wholesale market at less than €0/MWh; their economic consequences depend on the contract, the support scheme and the marketing structure. They are not to be equated with dynamic electricity tariffs, but can, in some cases, be passed on to end consumers via such tariffs. An EMS technically implements external marketing, price or setpoint specifications within the plant, takes into account local measurements and operating limits, and monitors the response of the components. EcoPhi can take on this technical control provided that the necessary data, interfaces and controllable components are available.
FAQ about negative electricity prices
Are negative wholesale prices and dynamic electricity tariffs the same thing?
Negative wholesale prices and dynamic electricity tariffs are not the same thing. A dynamic electricity tariff is an electricity supply contract which passes on, in full or in part, fluctuations in the exchange price over time to the end consumer’s electricity supply, depending on the specific tariff model. This means that negative exchange prices can also be partially reflected.
What technical requirements are necessary to respond to negative electricity prices?
The technical requirements are up-to-date market data or specifications from direct suppliers, reliable measurement data, controllable plant components and defined operating rules. Relevant connection, power, SOC and contractual limits must be known and adhered to.
What role does EcoPhi play when electricity prices are negative?
EcoPhi is neither an electricity supplier nor a direct marketer; rather, it provides the local technical control and communication layer within the customer’s installation.