Negative electricity prices return to Czechia. 'Free' power lasted a record time

Negative electricity prices returned to the Czech Republic after the crisis years of 2021 and 2022. According to publicly available statistics, there were 134 such hours last year in total. That is 15 more than in 2020, which had the highest number of hours with negative electricity prices since 2015. 

Spot electricity prices sent another signal last year that the energy crisis is slowly coming to an end. The first and most visible signal is energy commodity prices. Wholesale natural gas prices for the benchmark contract fell to 25 EUR/MWh, while electricity prices dropped to 75 EUR/MWh. Wholesale prices therefore remain higher than before the crisis, but are at approximately the level of May 2021.

Another signal is the number of hours when electricity prices on the day-ahead market fell into negative territory. There was so much electricity that its producers were willing to pay for it to be taken off their hands.

While electricity prices traded in negative territory for only 33 hours and 8 hours, respectively, in the crisis years of 2021 and 2022, they returned to the rising trend of previous years in 2023. A total of 134 such hours can be counted over the full year.

Electricity prices fell deepest into negative territory on Sunday, 28 May. On that day, they dropped as low as - 68,54 EUR/MWh. Electricity was "free" on the market from 10:00 to 17:00.

Negative prices are an undesirable phenomenon in the energy sector, as they point to insufficient flexibility in the system, or in the facilities connected to it. They occur most often at times of very low electricity consumption and weather conditions favourable for renewable electricity generation. They therefore occur very frequently on public holidays, when the weather is windy or sunny (or both).

Statistics on the periods when negative prices occur confirm this. In the Czech Republic, negative prices occur most frequently on 24-26 December and on the first day of January and May.

From a European perspective, the notional record holders, at least in terms of the number of hours with negative prices, are the Nordic countries of Finland and Sweden. Finland, which tops the ranking, recorded negative prices for a total of 467 hours last year, and in ten of those hours they even reached the - 500 EUR/MWh limit.

Customers with interval metering stand to benefit most

Negative (or generally low) electricity prices are positive in the short term for electricity consumers, who pay lower energy bills thanks to low prices. In the long term, the impacts of negative prices are rather negative, as they do not motivate investors to invest.

Low prices on short-term markets also have a positive impact on electricity prices for households. Households with interval metering can benefit from them the most. Only these households can enter into a contract with a price directly based on spot electricity prices. They can therefore benefit directly from low prices.

However, it is also possible to benefit (indirectly) from low or negative prices where a customer has a contract without price fixing or with monthly price fixing. Prices under these types of contracts are the most closely linked to electricity prices on short-term markets.

A complete overview of current electricity supply price lists can be found in our electricity price comparison tool.