Comment by thescriptkiddie
2 days ago
there are no circumstances under which it makes sense for energy prices to actually be negative. it is a sign of a market behaving very badly. propping up prices by intentionally wasting energy only treats the symptom not the cause.
It’s only ever brief and essentially a penalty to power generators for not turning off the generation in a reasonable time
In most markets, it happens because one player is being given some subsidy - ie. 'we will guarantee all power you sell sells for $X/MWh', or 'You get a contractual green bonus of $$$ if you produce XMWh this year'.
Those contracts mean the person producing the power is still incentivised to do it even with negative prices.