this post was submitted on 28 Apr 2025
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Negative prices are occurring more and more frequently. The cause is baseload generation: it can't be dialed back as quickly as solar increases during the day, and it can't be ramped up as fast as solar falls off in the evening. The baseload generators have to stay on line to meet overnight demand. Because they can't be adjusted fast enough to match the demand curve, they have to stay online during the day as well.
The immediate solution is to back down the baseload generators, and rely more on peaker plants, which can match the curve.
The longer term solution is to remove the incentives that drive overnight consumption. Stop incentivizing "off peak" consumption, and instead push large industrial consumers to daytime operation.