August 31, 2023

Negative prices growing with RES in GB power market

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The most common cause of negative power prices is high levels of system wind generation. Negative Day-Ahead power prices are still relatively infrequent. But negative real time system prices have become much more common across the last 3 years.

The chart shows a seasonal breakdown of the number of negative system prices in GB since 2016. Summer 2020 saw a spike given the Covid lockdown induced low demand shock. But more interesting is a strong upwards trend in frequency of negative system prices across winters: 58% annual growth rate from Winter 2017 to Winter 2022.

The impact of negative prices is also penetrating summer periods, with double the number this summer compared to last.

The increase in negative real time prices is one of the factors behind a rapid growth in battery volumes participating in the Balancing Mechanism (BM). And that is set to continue.

Negative prices growing with RES in GB power market