Negative electricity prices can happen when power stations, wind farms, and solar farms forecast that they’ll produce more electricity than suppliers and other buyers expect homes and businesses to use during a particular trading period.
If you have a suitable battery, a meter that records your electricity use every half hour, and a trading provider that can buy electricity on your behalf, you could benefit financially when wholesale prices turn negative.
In this guide, we explain how the market works and how you can take part in it.
What are negative electricity prices?
Wholesale electricity prices turn negative when generators, suppliers, and other market participants trade electricity for less than £0.
Negative electricity prices can affect:
- Day-ahead trading: Prices agreed the day before the electricity is supplied
- Intraday trading: Prices agreed closer to the time the electricity is supplied
- Imbalance settlement: Prices used to settle the difference between how much electricity market participants planned to generate or use and what they actually generated or used
These prices can differ even when they all relate to the same half-hour.
A negative price doesn’t mean the electricity is worthless or that every customer gets paid to use it. It means that, for a particular wholesale trade, the seller pays the buyer to take the electricity. That buyer could be an electricity supplier, trader, or trading provider acting for a business with a suitable battery.
The examples below cover Great Britain (England, Scotland, and Wales). Northern Ireland shares a separate electricity market with the Republic of Ireland, so they don’t apply there.
Do negative electricity prices mean your business gets paid to use power?
Your business will only benefit financially from negative electricity prices if:
- The price you pay follows wholesale electricity prices
- Your battery trading provider can set your battery to charge when wholesale prices fall below zero
However, neither route automatically means you get free electricity or a payment for using electricity.
First, you need to understand how your supplier calculates the price you pay for electricity. There are three main types of tariff:
- Fixed tariff: You pay an agreed price for each unit of electricity during your contract. Any short-term variations in wholesale prices won’t impact how much you pay.
- Time-of-use tariff: The price you pay varies at different times during the day, like separate daytime and night time prices. Again, any short-term variations in wholesale prices will not be reflected in your bill.
- Wholesale-linked tariff: The price you pay rises and falls in line with a wholesale electricity price. There will almost certainly be other charges on top which mean that, even if the wholesale price is negative, the price you pay will be positive.
Negative prices mean different things depending on your tariff and the equipment you have on site. Here’s how:
| Your on-site setup | What happens when wholesale prices go negative | What it could mean for you |
|---|---|---|
| Fixed or time-of-use tariff, with no battery trading | You continue paying the rates agreed with your supplier. | No automatic benefits from a negative wholesale price |
| Fixed or time-of-use tariff, with a battery but no trading service | You still pay the same to charge up your battery, even if there is a negative wholesale price | You pay less for your power by charging up at cheaper times or storing surplus power instead of using grid electricity |
| Wholesale-linked tariff, with equipment you don’t need to run at fixed times | The price you pay may fall during the negative-price period | Save money by switching activities like EV charging into that period |
| Wholesale-linked tariff, with a battery | Charge up while prices are low and use that electricity later | It costs less to store power and you save money by discharging on-site when prices are higher |
| Fixed or time-of-use tariff, with a trading service-linked battery | Your provider monitors wholesale prices so it can charge your battery when the market will pay it to take electricity | You may receive a payment as part of the agreement you have with your battery trading provider |
Does all the electricity discharged from a battery earn an export payment?
No. Electricity discharged from a battery supplies the site first.
Only the electricity left after meeting the site’s live demand can pass through the meter and count as an export.
This means you shouldn’t apply both an avoided import value and an export value to the same electricity.
Worked example
Take a battery with:
- 80 kWh of unused storage capacity
- A 100 kW battery and inverter power limit
- 90% round-trip efficiency
- One 30-minute charging period
The 100 kW power limit means the battery can charge by no more than 50 kWh during that half-hour. It can’t use all 80 kWh of its available storage capacity.
After allowing for the 90% round-trip efficiency, the battery can later return about 45 kWh.
During the later 30-minute discharge period, the site uses 40 kW. This means the site uses 20 kWh from the battery.
The remaining 25 kWh may be available for export, provided the site’s export limit, battery power limit, trading agreement, and operating rules allow it.
Apply the avoided import value to the 20 kWh used by the site. Apply any export or trading value only to the 25 kWh that could leave the site.
Then deduct:
- The charging cost
- Energy losses
- Trading and service fees
- An allowance for battery wear
- Any value the battery gave up by not doing something else
GridVolt’s energy arbitrage guide explains how to calculate the full gross and net value.
Our site has a battery. How can we benefit from negative electricity prices?
There are two main ways to benefit from negative electricity prices if you have an on-site battery setup.
Route 1: charge the battery through a wholesale-linked tariff
If you pay what the market charges at wholesale, charge the battery when electricity is very cheap or the wholesale price falls below zero. You can then use the stored electricity later, when buying electricity from the grid would cost more.
Whether you actually save money depends on:
- How your supplier calculates the final price
- How much empty space the battery has
- How quickly it can charge
- How long the negative-price period lasts
- Any other charges your supplier adds to the wholesale price
Route 2: use a battery trading service with a fixed or time-of-use tariff
A specialist energy aggregator can connect your battery to the wholesale market through P415, the rule that allows independent trading providers to act for commercial sites in Great Britain.
The aggregator may include your battery in a virtual power plant, where it controls batteries and other equipment across several sites as one larger group for greater trading opportunities.
When wholesale prices fall below zero, the aggregator may set your battery to charge. You may then receive a payment under your battery trading agreement.
Whether this route works for your site depends on:
- Whether the provider can connect to your battery and inverter
- Whether the battery has enough empty space to charge
- How quickly the battery can charge
- Your meter and site connection
- The fees and revenue share in your trading agreement
How can I check whether my site could benefit from negative electricity prices?
You’ll need to give a provider information about your electricity contract, battery, meter, and normal site electricity use.
The provider can then estimate:
- What your battery already saves
- What better battery control could save
- What battery trading could earn
Ask the provider to show these figures separately. You should also receive a cautious estimate, a central estimate, and a higher estimate, with all fees and assumptions clearly explained.
Information you’ll need
You won’t need to collect every technical detail before speaking to a provider.
For an initial check, they’ll usually need:
| Information | Why it matters |
|---|---|
| Your current electricity tariff | To see whether the price you pay changes with wholesale prices |
| Your battery’s size and make | To check how much electricity it can store and whether the provider can control it |
| Your site’s location | To check which tariffs and trading services are available |
| Recent electricity-use data, if available | To see when your site uses the most power and when the battery may have space to charge |
| How you currently use the battery | To understand whether it supports solar, peak demand, backup power, or another purpose |
If your site looks suitable, the provider may then ask you for more detailed meter, tariff, battery, and connection information before preparing a projection.
How can GridVolt help your business benefit from negative prices?
GridVolt can check which of the two routes is suitable for your site.
If you have a wholesale-linked tariff, our Energy Manager software controls your battery so it charges when electricity is cheaper and uses the stored power when prices are higher.
If you have a fixed or time-of-use tariff, GridTrade allows your battery to take part in wholesale energy trading while you keep your existing electricity supplier.
If you have both Energy Manager and GridTrade, we compare the value of using the battery on site with the value of trading and choose the action expected to deliver the greater financial benefit, while keeping enough power available for the site’s needs.
To find out more, fill in the form on the right or get in touch via the contact page.
Negative energy prices frequently asked questions
Why do wholesale electricity prices fall below zero?
Electricity generators and suppliers agree prices for particular trading periods. When supply exceeds demand, the price falls.
If far more electricity is available than buyers expect to need, the price can drop below zero. This encourages some generators to produce less and some buyers to use or store more electricity.
When are negative electricity prices most likely?
They’re most likely when high wind or solar generation coincides with low electricity demand.
This often happens overnight, at weekends, or on bank holidays, when homes and businesses generally use less power.
Why don’t generators simply stop producing electricity if prices go below zero?
Switching conventional power plants on and off is slow and expensive. Accepting a negative price for a short period may cost less than shutting down and restarting.
Some renewable generators also have support arrangements that affect how low they’re willing to price their electricity.
Do Contracts for Difference cause negative electricity prices?
Not directly, but they can affect how some renewable generators set their prices.
A Contract for Difference, or CfD, gives a low-carbon generator an agreed price for the electricity it produces. The government compares this agreed price with a wholesale market price and may pay the difference.
Generators awarded CfDs from Allocation Round 4 onwards don’t receive these payments when the relevant day-ahead price is negative. Older CfDs and other support arrangements may work differently.
Are negative prices the same as constraint payments?
No. A negative wholesale price happens when more electricity is available than buyers need during a particular trading period. A network constraint happens when the electricity network can’t move all the available power from where it’s generated to where it’s needed.
For example, the network may not have enough capacity to carry all the electricity produced by wind farms in one part of Great Britain. NESO may then pay some generators to reduce their output and others elsewhere to produce more.
Negative prices and network constraints can happen at the same time, but they’re separate market events.
Are negative-price periods becoming more common?
Drax’s published figures show a general increase, although the number doesn’t rise every year.
Drax recorded 155 hours of negative day-ahead prices in 2024, the highest annual total in its series dating back to 2016.
Published totals can differ because analysts may use different electricity exchanges, time periods, and definitions. The number of negative-price periods in future will also depend on factors such as battery storage, flexible electricity use, renewable generation, and new network capacity.