Dear Members of the Public Association “Energy Union”,
For your general information, we would like to note that electricity markets across the European Union operating under the Single Day-Ahead Coupling (SDAC) and Single Intraday Coupling (SIDC) frameworks apply a price cap system that includes both upper and lower price limits.
In other words, the European model is not limited to a maximum allowable price. It establishes a complete price corridor, allowing market prices to move both upward and downward depending on supply, demand, and system conditions.
Indicative price limits in EU electricity markets:
- Day-Ahead Market (SDAC): up to +EUR 5,000/MWh and down to –EUR 500/MWh.
- Intraday Market (SIDC): up to +EUR 9,999/MWh and down to –EUR 9,999/MWh.
- Balancing markets: depending on the specific balancing platform, price limits may reach ±EUR 15,000/MWh or even higher.
We would also like to emphasize that negative electricity prices are a normal and legitimate feature of modern European electricity markets. They are typically observed in situations involving:
- surplus electricity generation;
- high output from renewable energy sources (RES);
- incentives to increase electricity consumption during specific hours;
- power system balancing;
- the development and operation of energy storage systems.
Conclusion
When referring to European experience, it is important to recognize that the EU model encompasses not only an upper price cap but also a lower price limit, including the possibility of negative prices. This two-sided pricing mechanism is an integral element of a fully functioning competitive electricity market.
Kind regards,
Public Association “Energy Union”