Sometimes the UK's wind farms and power plants generate more electricity than the grid can handle, and that can turn wholesale prices negative. So, instead of you paying 24p per kWh for electricity, generators pay you to take their excess.
In this article, we explain how negative electricity prices happen, why they're becoming more common, and how to position your business to take advantage of them.
Already have solar and/or batteries on your commercial sites?
Skip to the end to find out how to take advantage of negative electricity prices.
Why do electricity prices go negative?
Wholesale electricity prices in Great Britain reset every half hour, moving up and down to reflect the balance between supply and demand.
When supply exceeds demand, the price falls. If the surplus is big enough, they drop below zero, leading to generators paying businesses to take that excess power off the grid.
4 reasons negative electricity prices are happening more often in the UK
Negative wholesale electricity prices were rare in the UK five years ago. Great Britain recorded around 29 hours of negative pricing in 2022, rising to 107 in 2023 and a record 155 in 2024.
Four factors driving this surge are:
1. More renewable generation capacity than the grid can absorb
Wind and solar capacity in the UK is growing faster than the demand for electricity. In 2025, the UK expected to create 7.4 GW of new capacity, including major offshore wind projects. As that gap widens, the periods when supply outruns demand get longer and more frequent, and that is when prices fall or turn negative.
There are two driving factors at work here:
- Supply spikes from weather: high winds overnight and into the early morning, when demand is at its lowest, and solar peaks around midday in spring and summer
- Demand troughs: weekends and bank holidays, when offices, factories and shops are quieter.
When the two happen at the same time, the downward pressure on prices is amplified.
Between 2019 and 2025, around 5.5% of weekend days saw at least one period of negative pricing. On bank holidays, that figure was 8.3%.
2. Subsidies mean generators still make money during periods of negative pricing
It sounds counterintuitive but it makes commercial sense for renewable energy generators to keep on generating, even when wholesale electricity prices go negative.
This is because of financial subsidies like:
- Legacy Renewables Obligation Certificates (ROCs): These pay over £60 per megawatt hour, or roughly 6p on every unit of electricity.
- Renewable Energy Guarantees of Origin (REGOs): REGOs can add roughly £20 per MWh on top as well.
These out-of-market payments mean some generators still turn a profit even when they're paying businesses to take their electricity.
This might sound like a market failure but it’s deliberate policy. The goal was to encourage investment in renewables as the UK moved away from fossil fuels.
These arrangements won't last forever, though.
Newer Contracts for Difference (CfDs), awarded from 2022, offer lower compensation, which is gradually reducing the incentive to generate during negative-price periods. But legacy contracts under the Renewables Obligation and earlier CfD rounds will still continue to run on for many more years.
So, it’s not as good as it used to be but it will be good enough for the next few years to continue like this.
3. Inflexible conventional generation
Switching conventional power plants on and off is slow and expensive, and this is another reason generators stay online when the grid doesn't need the power.
For example, you can’t restart a nuclear power plant reactor the morning after you shut it down. The build-up of neutron-absorbing gases in the core prevents restart for one to three days. Plus, it costs nearly as much to run a nuclear facility with an idle generator as running one at full power.
In a gas power station, every shutdown and restart stresses the boiler, steam lines and turbine. That wear shortens component life and drives up maintenance costs.
In both cases, it's a lot cheaper to just ride out a few negative-price hours.
4. Bottlenecks in the grid
Scotland and the North Sea have the most potential for generating wind power. But most of the demand for electricity comes from Southern England. When the transmission lines connecting the north to the south are full, surplus electricity simply has nowhere to go.
The National Energy System Operator (NESO) manages this by paying electricity generators to reduce their output. These "constraint payments" now total over £1.5 billion per year. That cost feeds back into everyone's bills through non-commodity charges like the TNUoS charge.
Grid upgrades are underway. The Great Grid Upgrade programme aims to double north-to-south capacity by the end of the decade, but these are complex infrastructure projects that will take years to complete.
2 ways to benefit from negative pricing
Negative pricing happens in the wholesale market, where generators sell electricity to energy suppliers.
Most business fixed-rate energy contracts provide stable pricing. You get predictability, but you also miss out when wholesale prices drop below what you're paying.
There are two ways for businesses to get access to wholesale price movements:
1. Wholesale-tracking tariffs
These are energy contracts tracking the wholesale price, like Octopus Agile. You pay what the market charges each half hour, including the lows.
2. Battery trading arrangement
Trade your stored battery power on the wholesale market. Charge your batteries when prices are cheap or negative, then discharge when the wholesale price is high.
Your profit comes from the spread between what you paid to charge and what you earn when you discharge.
How to make money from negative electricity prices if you already have commercial battery storage
Batteries make money from charging when wholesale prices are low and discharging when they're high, often called energy arbitrage.
Take a day when wholesale prices dip to minus £20 per MWh overnight and reach £80 per MWh by the evening peak. That £100 per MWh spread is your margin or revenue you can bank or use to offset your energy bill.
This is an extreme example, but a gap between the cheapest and most expensive half-hours exists every trading day, not just when prices turn negative. The size of the gap varies but the opportunity to arbitrage it does not.
The catch, until recently, was access. Before November 2024, the only route to wholesale markets was through your electricity supplier, and most suppliers didn't offer the service. Running a trading desk for individual business batteries cuts into supplier margins and competes with their own generation positions.
That changed when Ofgem approved a rule change called P415. Battery owners can now sell electricity to the grid through a specialist third-party trader, independent of who supplies their site. The supplier relationship and the trading relationship are now two separate things, and the trading relationship is where the arbitrage revenue actually comes from.
Who can benefit from negative electricity pricing?
There are two parallel ways to capture the value in negative and low prices. Each one suits a different commercial setup.
On a wholesale-linked tariff like Octopus Agile, your tariff already changes when there is price movement in the market. Software running your battery uses those price changes to charge when electricity is cheap and power the site when it's expensive.
On a standard tariff, you keep your existing supply contract and use a P415 trading service to buy and sell on the wholesale market through your battery. The choice depends on whether you want your tariff to follow the market, or your tariff to stay fixed and your battery to do the trading.
How to maximise revenue and savings from negative electricity pricing
Building energy management systems, or BEMS, manage when and how a building uses power.
The problem is that many still work to fixed schedules. That means they charge or discharge a battery at the same time each day, regardless of whether the weather is dull or bright or demand is high or low. They simply work to a pre-defined cycle, which can mean charging before a sunny spell or discharging before the site actually needs the power.
When prices go negative, the ability to respond quickly matters even more. The sites that benefit most are already in position when the price drops. A battery that is full, mid-cycle or unable to respond will miss that window.
GridVolt offers two products that handle this for you, one for each route.
Energy Manager is a software platform that manages your solar, batteries, EV chargers and other assets. It forecasts site load and solar generation 96 times a day to plan the best time to charge, discharge, store, export or use electricity on site. On a wholesale-linked tariff, that means buying at the lows and avoiding the spikes without you needing to watch the market.
When prices go negative, the ability to respond quickly matters even more. The sites that benefit most are already in position when the price drops. A battery that is full, mid-cycle or unable to respond will miss that window.
GridTrade is the other route. You keep your existing fixed or time-of-use tariff and GridTrade provides wholesale market access via P415. Your battery charges when the market pays you to take power and discharges when prices are high. The revenue comes from the spread between those two points.
Both routes turn negative pricing into one of three outcomes:
- Lower energy costs
- Stored energy for later use
- Extra trading revenue
How would this work in real life? Imagine a hotel with a 200 kWh battery on a standard time-of-use tariff, using GridTrade as part of its hotel energy management system. The system sees that prices are likely to turn negative at midday, so it holds the battery back through the morning to keep capacity free.
When the price drops, the hotel charges while the market pays it to take power. It then uses or exports that energy later, when it has more value.
Get an estimate on Energy Manager and GridTrade returns
Expect periods of negative and very low pricing for years to come. The UK government's solar roadmap targets 45 to 47 GW of installed solar capacity by 2030. NESO's Future Energy Scenarios project offshore wind reaching up to 100 GW by 2046. More intermittent generation feeding into the same grid means more periods of oversupply.
If you have solar and batteries in place, or just batteries, contact us for a free estimate showing projected returns across different scenarios. Energy Manager and GridTrade work with a range of third-party battery and inverter brands. If you don't have a battery yet, we work with many industry partners who do, and we can introduce you.
Book a call for a free compatibility check and earning projection for your site.