This Spring, California electricity generators have been doing the electricity market equivalent to calling 1-800-GOT-JUNK. Between March and July, there were over 100 hours in which wholesale prices were below zero. These negative prices have received lots of attention, and the discussion has almost universally attributed negative prices to California’s ramp up in solar generation.
Solar is indeed part of the story, but another explanation is at least as important. Over the last decade, hydro, not solar, has been the primary driver of negative electricity prices in the United States. The year 2017 is no exception. Spring 2017 was among the rainiest in history, and it is this combination of hydro and solar that has pushed prices below zero.
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(Thanks to GRC Member Marcelo Lippmann, Staff Scientist (retired) at Lawrence Berkeley National Laboratory for the submission.)
