Hours with negative electricity prices in Czechia nearly doubled last year

In 2017, the number of hours during which electricity traded on the day-ahead market in the Czech Republic at negative prices nearly doubled. The significant increase in the number of hours was driven primarily by the Herwart windstorm in autumn and windy weather over the Christmas holidays.

The significant rise in the number of hours with negative electricity prices had already become somewhat apparent during last October due to the previously mentioned Herwart windstorm. However, since then electricity prices fell into negative territory on two further occasions: over the Christmas holidays and during excessive electricity generation from wind farms in Germany in November.

These two events also contributed to negative prices occurring on the day-ahead market in a total of 109 instances, compared with only 58 hours in 2016.

Overall, the day-ahead market saw substantially higher year-on-year volatility. This was caused not only by the more frequent occurrence of negative electricity prices, but also by extremely high prices, which appeared on the day-ahead market particularly at the beginning of the year in connection with minimal wind farm output and a shortage of capacity at nuclear power plants in France. French nuclear power plants affect the Czech market thanks to the partial coupling of the French, German and Czech markets.

Unsurprisingly, a total of 3/4 of the days on which negative prices occurred fell on weekends or public holidays. These days are typically characterised above all by lower electricity consumption. As expected, negative prices occurred most frequently between 2:00 and 5:00 in the morning, again a period of low energy consumption.

At the same time, given the correlation between electricity prices on the German and Czech day-ahead markets, some of the impact on Czech prices can be attributed to German wind farms.

Data published on energostat show that the average output of German wind farms (both onshore and offshore) during periods of negative electricity prices last year reached 28.5 GW, more than the total installed capacity of all power plants in the Czech Republic. This represents an increase of 3.2 GW compared with 2016.