Negative electricity prices, a phenomenon where energy is sold at a price below zero, have increased significantly in France in 2024. According to the Energy Regulatory Commission (CRE), 235 hours were recorded in first half, compared to 147 hours for the whole of 2023. This phenomenon, which represented 5.4% of the time in 2024, generates significant economic losses for the French electricity fleet.
The origins of negative prices
Negative prices occur when electricity supply far exceeds demand, pushing some producers to pay to maintain production. This situation often results from sub-optimal management of production parks and certain terms of support systems for renewable energies. Facilities benefiting from a fixed tariff, insensitive to market fluctuations, continue to produce, even in periods of negative prices. This increases the costs for the State, estimated at 15 million euros in the first half of 2024, because these systems compensate for the losses of obligated buyers.
The economic weight of negative prices
The CRE estimates that negative prices have led to a loss of 80 million euros for unsupported French producers in 2024. The latter maintain a certain production to avoid the high costs of stopping and restarting their installations. Conversely, stopping parks benefiting from a fixed rate could have avoided part of these losses.
Despite these challenges, French electricity exports have partially cushioned the impact of negative prices. France exported electricity in 85% of cases where these prices were observed, although the volumes exported were lower than those recorded during periods of positive prices.
CRE recommendations
To reduce the impact of negative prices, the CRE proposes several measures, in particular incentives to shut down subsidized installations during these periods. It also calls for investments in structural solutions, such as developing electricity storage capacities or improving demand flexibility. These measures aim to better align supply and demand, while reducing the inefficiencies of the current system.
A growing phenomenon
Through 2022, negative price hours have never exceeded 102 hours per year, accounting for 1.2% of the time. Their multiplication over the last two years reflects an urgent need to adapt the French electricity system to minimize economic losses and optimize resource management.
Finally, the CRE underlines that other levers, such as strengthening interconnections with neighboring countries or better European coordination, could also be explored to mitigate these imbalances.
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