Negative electricity prices: why power can cost less than zero

Negative electricity prices mean the spot price of power falls below zero — producers are effectively paying to get rid of electricity. It happens when, for some hours, more power is produced than is demanded: typically on windy and sunny days with low consumption, such as weekends and holidays. For you as a consumer it means the power itself is free or better in those hours — but your total price rarely goes negative, because tariffs, taxes and VAT still have to be paid. You can see today’s and tomorrow’s spot prices hour by hour — negative ones included — on the electricity prices page.

Why would anyone sell power below zero?

It sounds illogical, but there are rational reasons producers bid at negative prices instead of switching off:

• Wind and solar produce when the weather decides. Renewable production follows the weather, not demand — and on the best production days it exceeds what Denmark and its neighbours can absorb.
• Some plants are expensive to stop and start. For a power station it can be cheaper to run through a few negative-price hours than to shut down and start up again.
• Support schemes. Some producers receive support per unit produced and can therefore make money even when the market price is below zero.

When the cables to neighbouring countries are full at the same time, the surplus cannot be exported away — so the price in the area falls until supply and demand meet. The same mechanics explain the price differences between DK1 and DK2 — read more in the article on electricity prices hour by hour.

Will my electricity bill go negative?

Rarely. The spot price is only one part of your total electricity price: on top come the retailer’s markup, the grid company’s tariff, Energinet’s tariffs, electricity tax and VAT — and those don’t disappear just because the spot price does. On the electricity prices page you can enter your postcode and see exactly how your price is composed hour by hour, including in hours with a negative spot price.

If you have an hourly-priced contract, though, you can use the negative hours actively: shift flexible consumption — dishwasher, laundry, EV charging, heating — into the hours where power is cheapest or free. You know tomorrow’s prices from early afternoon — see how in the article on electricity prices tomorrow.

Negative prices are a symptom — flexibility is the answer

Negative electricity prices are really the power system’s way of shouting for flexibility: there is surplus power, and the grid needs someone to use it — or store it. That is exactly the role households with batteries and heating devices can play:

• A home battery can charge when power is cheapest or negative and deliver again later — and it can simultaneously sell its response capability to Energinet as ancillary services. It doesn’t even require solar panels — see the article on a battery in a home without solar.
• Heat pumps and water heaters can raise consumption while power is cheap, using the house and the water tank as storage.

The more households that offer flexibility, the better the system can absorb the swings from wind and solar — and the more stable prices become over time. How your home can join and share the revenue is covered in the article on grid balancing for households.