Electricity prices can become negative due to grid oversupply
the verdict
SUPPORTED
the evidence backs this
confidence 88/100
Wholesale electricity prices can indeed drop below zero when grid oversupply occurs, driven by high generation from inflexible or low-marginal-cost renewable sources during periods of low demand.
The study explicitly states that negative electricity prices result from system-wide oversupply or local transmission congestion where supply exceeds demand.
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Ever More Frequent Negative Electricity Prices: A New Reality and Challenges for Photovoltaics and Wind Power in a Changing Energy Market—Threat or Opportunity, and Where Are the Limits of Sustainability?
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The article notes that negative electricity prices have become a recurring reality in markets experiencing rapid expansion and oversupply of renewable energy sources like wind and solar.
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The paper discusses how excess energy generation and supply imbalances push wholesale prices down into negative pricing territory.