Why electricity prices turn negative, and who pays

Last spring, electricity in Portugal cost less than nothing. Not for a minute. For more than two hundred hours, in just three months. So did anyone get paid to use power? Let's find out who actually pays.

Every day, Spain and Portugal hold an auction for tomorrow's electricity. Power plants say how much they can deliver, and at what price. Buyers say how much they need. Where the two lines cross, that's the price for that hour.

On a sunny spring afternoon, millions of solar panels all produce at once, while demand is low. Wind turbines are spinning, dams are running, and nuclear plants can't just switch off for a few hours. Supply is bigger than demand. And some producers would rather pay a little than stop, because stopping and restarting costs more, or because they earn support for every kilowatt-hour they deliver. So the price drops below zero.

In the first half of this year, Portugal had more than 460 negative hours. Spain, almost 600. That's the most in Europe, partly because Iberia has only a few cables to France to send the surplus away.

So who pays? First, the solar farms themselves: at noon, their power is worth almost nothing. Then the evening comes. The sun is gone, gas plants fire up, and the price jumps. Midday prices in Iberia now sit around forty percent below the daily average, and the evening peak can be seventy-five percent above it.

And you? If you have a fixed price contract, you notice nothing. With an indexed tariff, the energy part of your bill can drop to almost zero at noon. But grid fees, the supplier's margin and VAT still apply. So in Portugal, you don't get paid to run the dishwasher. Not yet.

Since the end of October, this house logs the market price every hour. On the first of November, it was below zero from ten in the morning until three in the afternoon. At seven in the evening: twenty-six cents. That day, the house exported almost ten kilowatt-hours, nearly all of it in those free hours. It gets a fixed three cents, so on that day, the fixed contract won. But a few days later it was cloudy and calm, and the midday price stayed around twenty cents. Over nine days, the power this house exported was worth almost nine cents per kilowatt-hour on the market. Three times what it gets paid. A fixed export price protects you on sunny days, and costs you on grey ones.

What can you do? Use your own solar power at noon: charge the car, heat water, run the washing machine. A battery helps too. And a dynamic tariff only pays off if you can actually move your usage to those cheap hours.

In one sentence: negative prices are a sign of too much sun at the wrong time, and the winners are the homes that can shift. Next time, we measure what to do with our own surplus: a second battery, the car, or the water heater. I'm Joulie. Real data, real costs, your call.