As the electricity system operator for Great Britain, we move electricity safely, reliably and efficiently through the system, ensuring power is there when it’s needed. With more renewable generation on the system than ever, when its available, we want to use as much of it as possible, so we don’t waste it and we keep costs down for consumers.
The blustery conditions this weekend meant lots of wind power was produced. That meant a surplus of wind energy, which is where negative pricing comes in.
What is negative pricing and who runs it?
Some energy suppliers (companies who buy energy in the wholesale market and sell it on to customers) offer flexible time of use tariffs. Time of use tariffs are designed to incentivise customers to use more energy at off-peak times, in order to balance demand. These tariffs charge cheaper rates at certain times of night or day, when demand is at its lowest, and higher rates at popular times.
Over the weekend some consumers on these flexible tariffs were offered energy prices that saw them paid for every unit of electricity they used because the supply of electricity was so high due to all the extra wind.
Using this excess energy in homes and batteries across the country helps us in our role balancing the grid and avoids energy being wasted. This is a smart electricity system in action.
As the ESO moves towards its 2025 ambition of being able to operate our electricity system carbon free, we will need increased flexibility to balance the grid. And as part of our role, we’re facilitating intelligent energy use and new technology across lots of different areas, so we can help the UK to transition to a low carbon energy system.