What does it mean when the price of solar energy is negative? (Get paid to charge your EV – or make hydrogen!)

  • Published on May 7th, 2020

Denialists complain bitterly about the variable output of wind and solar energy systems. But for consumers, that means that the cost of electricity is necessarily negative sometimes. You get to arbitrage your recharging, if your government does not interfere. Others get to use negatively-priced energy to make hydrogen from water, as a form of energy storage.

EV chargers in Iowa

By Mokurai

Nathaniel Bullard – Bloomberg Green

Clear skies over Germany meant that intraday wholesale power prices were negative earlier this week. In the U.K. on April 19, electric vehicle charging platform Ohme said that its customers were paid 69 pence to add 130 miles of charge to their vehicles.

Negative prices are a feature of a properly functioning energy market, and perhaps you noticed on Monday that the key U.S. oil benchmark closed trading at -$37.63 a barrel. The negative prices that indicate a profoundly dislocated oil market also indicate a world of new applications for solar.

This is bigger than the market havoc of the pandemic. It’s just the beginning, really. People will get paid to charge. Services will crop up, on-demand, to use free or negatively-priced electricity. Fleets of electrolyzers will use renewable electrons to produce hydrogen and help reduce emissions in all the things like steel, cement, and glass production that are right now a massive environmental challenge.

And that’s the revolution. It would have seemed ridiculous even 10 years ago, much less 50, and yet here we are.

Negative prices occur when supply offered is greater than demand. But only if there isn’t enough storage.
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Negative prices: how they occur, what they mean – Stanwell

Negative prices occur when supply offered at negative prices is greater than demand. These events generally occur in the middle of the day when generators (i.e. rooftop solar, large-scale solar, wind and coal-fired generators) are competing to dispatch their energy.

Negative prices are a signal to either increase demand or reduce supply. Intermittent and fast response energy sources (such as solar, wind, peaking generators) can stop and start in relatively short spaces of time to avoid negative price periods. Coal-fired generators however, incur significant costs stopping and starting and require many hours to restart. This means they continue generating throughout negative pricing periods as it is more cost-efficient to incur the costs of negative pricing than shutting down and then starting up again. This ensures that they are available to meet peak demand in the late afternoon and evening once the intermittent sources such as rooftop solar and large-scale solar are no longer available.

It is important to note, negative prices occur in the wholesale electricity market and do not occur in the retail electricity market.

Except when they do.

The causes and effects of negative power prices | Clean Energy Wire

Jan 5, 2018 – When power prices on the electricity exchange fall below zero, power suppliers have to pay their wholesale customers to buy electric energy.

The Curious Case of the Negative Prices

The frequency of LMPs that are at zero or even at negative levels has been increasing in markets with high levels of market participation by wind and solar energy.

Negative prices in the MISO market – Fresh Energy

Nov 15, 2018 – What’s happening and why should we care?

Because wind and solar power are nearly free to run when the wind is blowing and the sun is out, there is a concern that increased renewables may lead to more frequent negative pricing events. However, there has been little data.

Fresh Energy set out to find on how much, and how often, electricity pricing goes negative and what is causing the issue in Minnesota and our region. We took a dive into the numbers, analyzing wholesale market pricing data from 2015-2017 in the Midcontinent Independent System Operator (MISO) market, where energy is bought and sold from Manitoba to Louisiana.

  • Negative prices are occurring in the MISO market, but at very low frequencies—less than 2 percent of hours on average since 2015—and have declined over the past three years.
  • MISO North, where a large percentage of MISO’s wind resources are located, have more negative price events but the frequency has also declined since 2015.

There is a small peak in negative price frequency in the early morning hours between 3:00 and 5:00 AM which matches expectations – in this timeframe wind generation is high and load is low.

So that’s when you should charge your car. It saves you money, and it evens out the load on the grid. As noted above, in some places you can get paid to charge your car, making this kind of personal arbitrage even more attractive.

Negative Prices in Power Market as Wind Solar Cut Electricity Cost — Bloomberg

Aug 6, 2018 – Power Worth Less Than Zero Spreads as Green Energy Floods the Grid.

Wind and solar farms are glutting networks more frequently, prompting a market signal for coal plants to shut off.

Or in the limit, shut down. The price doesn’t have to go negative to achieve that. It is sufficient if the wholesale price for electricity is below the cost of coal for generating it.

(Crossposted with DailyKos.)



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