Negative prices on Czech day-ahead market rise, already more frequent than last year

As a result of Storm Herwart last week, the number of hours in which the price of electricity on the Czech day-ahead market was negative this year reached 60. There were only 58 such hours in the whole of last year. Germany has already experienced negative prices for 103 hours this year.

Negative prices have been occurring increasingly often in recent years as the capacity of wind power plants grows in Central Europe. It is therefore becoming increasingly common for consumers to be paid to take electricity on the day-ahead market.

A typical example was last weekend, when Storm Herwart swept through the Czech Republic and other European countries, causing electricity prices on the Czech day-ahead market to remain in negative territory for 18 consecutive hours. Prices fell as low as -50 EUR/MWh.

This year, negative prices have thus already occurred for 60 hours. This is already more than in the whole of last year. It is likely that negative prices may still occur during the next two months. For comparison, a negative price was recorded for 58 hours during the whole of last year.

Germany is in a similar position, where following the windy weekend, the number of hours with negative prices this year exceeded 103. Here, too, there has been an increase compared with last year, when prices fell into negative territory for “only” 97 hours in the whole year.

Extreme prices are appearing on the market increasingly often

Moreover, this year has also seen far more hours with extremely high electricity prices, mainly due to the start of the year. January and February saw relatively weak wind power generation, compounded by a number of plant outages in France and cold weather. All these factors meant that electricity prices on day-ahead markets were relatively high.

Prices on the day-ahead market above 100 EUR/MWh were recorded for a total of 52 hours this year, peaking at 141 EUR/MWh. By contrast, electricity exceeded 100 EUR only once during the whole of last year, reaching 101.7 EUR/MWh.

The following chart, which shows the distribution of electricity prices by frequency of occurrence, indicates that day-ahead market prices have shifted towards higher values compared with last year. It is also clear that prices were much more frequently at extreme levels, both positive and negative.