Finland made history on Wednesday when its average electricity price dropped below zero for the first time, as a surge of renewable energy flooded the market.
The Nordic country, which relies heavily on hydropower, nuclear power, wind power and solar power, saw its electricity supply exceed its demand due to favorable weather conditions and low consumption.
“The average price for the day is now slightly, but nevertheless, on the negative side. Yes, it is historic,” Jukka Ruusunen, CEO of grid operator Fingrid, told Yle, a Finnish public broadcaster.
According to Fingrid, the market price for electricity fell to -0.01 euros per kilowatt-hour (kWh) before noon and stayed there for several hours before rising slightly in the evening.
The negative price means that electricity producers have to pay consumers to use their electricity, rather than the other way around. This creates an incentive for consumers to increase their electricity usage and for producers to reduce their output.
“Electricity production must also be profitable for nuclear power plants, and when the price is particularly low, there may be situations where output is limited,” TVO communications manager, Johanna Aho, said.
TVO, the owner of Finland’s newest nuclear power facility, Olkiluoto 3, which started regular production in mid-April after a 14-year delay, had to cut back its output significantly due to the low price.
“When prices go negative on the electricity market, basically anyone who can adjust their production will do it, so that they don’t have to pay for their own production,” Janne Kauppi, an energy markets advisor at Finnish Energy, noted.
Finland is not the only country that has experienced negative electricity prices. In recent years, countries such as Germany, Denmark and Sweden have also seen their prices dip below zero due to an oversupply of renewable energy.
However, Finland’s case is remarkable because it shows how far the country has come in its transition to a low-carbon economy. Finland aims to achieve carbon neutrality by 2035 and to phase out coal by 2029.
“We have a very good chance of building on this with industrial investments for the green transition. Finland is truly competitive; emissions are close to zero and everything is working fine,” Ruusunen pointed out.
- Finland’s average electricity price slips into negative territory | Yle Uutiset | May, 17, 2023
- Finnish nuclear plant throttles production as electricity price plunges | Yle Uutiset | May, 17, 2023
- Finland: monthly electricity prices 2023 | Statista | May, 4, 2023