Negative Energy Pricing Becoming More Common as Clean Energy Outdoes Fossil Fuels

Imagine living in a world where one of the most significant threats in the decades ahead is for the most part not being properly addressed, and is in many ways being exacerbated. The threat is climate change, and for one thing, it’s being exacerbated by having massive fossil fuel subsidies instead of massive clean energy subsidies. This is of course despite clean energy already regularly outcompeting fossil fuels.

Bright and breezy days are becoming a deeper nightmare for utilities struggling to earn a return on traditional power plants.

With wind and solar farms sprouting up in more areas — and their power getting priority to feed into the grid in many places — the amount of electricity being generated is outstripping demand during certain hours of the day.

The result: power prices are slipping to zero or even below more often in more jurisdictions.

[…]

Periods with negative prices occur when there is more supply than demand, typically during a mid-day sun burst or early morning wind gust when demand is already low. A negative price is essentially a market signal telling utilities to shut down certain power plants. It doesn’t result in anyone getting a refund on bills — or in electric meters running backward.

Instead, it often prompts owners of traditional coal and gas plants to shut down production for a period even though many of the facilities aren’t designed to switch on and off quickly. It’s left the utilities complaining that they can’t earn the returns they expected for their investment in generation capacity.

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