Effects of Extreme Spot Market Prices on the Electrical Power System: Lessons From the Finnish Distribution System

In the past few years, both high and low spot prices have become common in the Finnish power system. This paper seeks to demonstrate the effects of exceptional negative and positive prices on electricity consumption. On 24 November 2023, an extreme case was observed in the Finnish electricity market area, when spot prices reached values of −500 €/MWh for half a day. This meant that even with distribution fees and taxes added to the spot price, the end users were paid over 0.4 €/kWh for their electrical energy use, which produced an incentive to consume electricity. Another special case occurred on 5 January 2024, when the spot price of electricity rose to a record of 1896 €/MWh. For a customer with a spot-price-based contract, the retail price was over 2.3 €/kWh with the value added tax, making electricity consumption very expensive. Thus, the electricity consumption was affected by spot prices. The consumption increased considerably as the spot prices declined to −500 €/MWh and correspondingly, decreased with high spot prices. The main influence on consumption was observed in households that had retail electricity contracts based on spot prices, which provided them with a direct incentive to adjust their electricity consumption. A previous version of this paper was presented at the CIRED 2024 Vienna Workshop.