Plentiful electricity turns wholesale prices negative

In 2020, average wholesale electricity prices in the United States fell to $21/MWh, their lowest level since beginning of 21st century. Low natural gas and proliferation low marginal cost resources like wind solar had already established a trend toward lower prices, this was exacerbated by declining demand due Covid-19 pandemic 2020. Negative real-time hourly occurred about 4% all hours market nodes across States, but these were not distributed evenly. Regional clusters emerged, for example, Permian Basin western Texas, Kansas Oklahoma Southwest Power Pool (SPP), negative accounted more than 25% hours. result either from local congestion transmission system leading supply exceed locally or system-wide oversupply. Looking at latter condition SPP, we find that major generator types contribute excess supply, because limited ramping flexibility self-scheduled out-of-market unit commitments. Additional monetary production incentives such as renewable energy credits tax also enable bids; indeed, predominantly occur when levels are high. Frequent can inform value additional investments specific locations, need storage development, opportunities load growth adaptation.