Electricity markets in Finland made history early Monday when prices dipped into negative numbers. According to data from power exchange Nord Pool, between midnight Sunday and 4am on Monday, electricity prices in Finland fell into negative territory.
Prices bottomed out between 2am and 3am on Monday, when they fell to minus 20 cents per megawatt hour.
Antti Paananen, head of markets with the Finnish Energy Authority, said that there was one simple reason for the unusual situation.
"Output was greater than consumption," he commented.
Atlantic storm and factory strike dim demand
Wind energy output received a boost from storm winds blowing in from the Atlantic Ocean. At the same time electricity consumption has been minimal due to the unseasonably mild conditions. In addition, an ongoing strike by workers in the paper industry has also lowered consumption.
Paananen noted that while electricity prices have fallen to negative lows in Denmark and Germany on many occasions in the past, it is the first time this has happened in Finland.
A similar price drop in Denmark saw electricity prices fall as low as minus 2.68 euros in the early hours of Monday morning.
Discounts for power exchange users
In practice negative prices mean that electricity producers are paying consumers for the power they use. Consumers with contracts tied to Nord Pool prices will therefore see a discount for the hours when prices went negative.
In Finland, fewer than one in ten households have electricity contracts that are tied to the exchange. While they might see a small dip in their electricity bills, they still have to pay a fixed basic fee as well as a margin on the power exchange price. These factors will likely mean that they won’t see any major price cuts as a result of the cheaper hours.
Paananen also pointed out that a price of minus 20 cents per megawatt hour means 0.02 cents per kilowatt hour.