Making Good Use of the “Negative Electricity Price” Signal (Micro Perspective)
As market-oriented reforms deepen, electricity prices in some regions have begun to fluctuate based on supply and demand. In the electricity spot market, “negative electricity prices” can even occur during certain periods. This year, Liaoning has experienced continuous negative electricity prices for many hours. Previously, electricity prices in Sichuan, Shandong, Zhejiang, and Inner Mongolia have also dropped below zero.
What does this new price signal of “negative electricity prices” mean? How should we view it? Overall, it is a product of the large-scale integration of new energy into the grid under the backdrop of actively advancing electricity market reforms.
In terms of installed capacity and power generation share, China’s new energy is gradually transitioning from a “supplementary energy source” to a “main energy source.” However, wind and solar power lack the peak-shaving capabilities of traditional thermal power, and the demand-side response mechanism still needs improvement. This leads to mismatches between supply and demand in certain periods and regions. Therefore, a more mature market mechanism is needed to promote effective consumption, using more sensitive price signals to guide the dynamic balance of supply and demand.
For the electricity market, the full entry of new energy into the market will bring more complex regulation issues and more diverse market impacts. Peak shaving and valley filling, as well as balancing supply and demand, are no longer limited to the coordination of new energy and thermal power or the adjustment between off-peak and peak seasons. It must also incorporate new business models such as energy storage and virtual power plants into overall planning.
When “negative electricity prices” appear on the market, it is not just about power plants shutting down to reduce output or compensating for losses through environmental benefits. Energy storage stations can “buy low” by charging, and virtual power plants can purchase electricity at low prices and release it during peak hours, multiplying the benefits of system regulation.
In a multi-source complementary new power system, short-term “negative electricity prices” not only reflect real-time changes in supply and demand but also highlight the importance of accelerating the development of flexible power resources. By focusing on this price signal and advancing supporting mechanism reforms, various entities can improve efficiency and enhance vitality through competition.
It should also be noted that electricity is closely related to the national economy and people’s livelihoods, and any changes can have widespread effects. Market reforms must be steadily advanced under the premise of stability and order. While maintaining price flexibility, establishing reasonable monitoring and intervention mechanisms is essential to balance market vitality with public stability, achieving the dual goals of stable energy supply and efficient resource allocation.
Regarding “negative electricity prices,” market risks should be effectively prevented. Currently, regions that allow negative electricity prices not only set price floors but also have relatively mature energy storage industries, demand response mechanisms, and cross-regional trading systems, providing more means to cope with price fluctuations. At the same time, this price reform does not currently involve residential electricity consumption, and the proportion of electricity spot market trading volume is generally within 10%. Power plants typically lock in most of their revenue through medium- and long-term contracts, so they will not face excessive operational pressure.
To better address this challenge, the goal is not to eliminate “negative electricity prices” but to coordinate the construction of a new energy system and a new power system, achieving a higher level of dynamic balance between supply and demand through more rational layouts and smoother mechanisms. For example, regions rich in wind and solar resources should accelerate the development of supporting industries such as energy storage and introduce reasonable settlement policies to ensure power generation revenue. Major energy consumption areas can enhance system regulation capabilities and improve resource allocation by expanding intraday trading and shifting industrial production during peak periods.
The green transformation of energy and the reform of electricity prices are complementary projects that drive each other forward. In this structural change, “negative electricity prices” serve as an indicator of the system’s operational status and a manifestation of the market’s self-regulation through price signals. Understanding market signals, deepening mechanism reforms, and improving response capabilities are essential to better grasp the pace of transformation and successfully advance high-quality development.
Liaoning
Liaoning
Sichuan
Shandong
Zhejiang
Inner Mongolia
Mukden Palace
Jinzhou Pagoda
Похожие новости
Francia annuncia la prima formazione del nuovo governo.
Starting next month, Wuhan will distribute crayfish vouchers and pay to invite you to eat crawfish.
Avviso di traffico per l’evento da diecimila persone al Wuhan Sports Center venerdì.
Wang Zhonglin incontra e conforta veterani e anziani compagni della Guerra di Resistenza, consegnando medaglie commemorative per promuovere il grande spirito patriottico e di resistenza, unendo forze potenti per costruire una patria più prospera e forte.
