ANALYSIS OF THE OCCURRENCE OF THE NEGATIVE PRICE ON THE EUROPEAN ENERGY EXCHANGE (EEX) ELECTRICITY SPOT MARKET

Abstract

The EEX (European Energy Exchange) has become, along with Nord Pool in Nordic countries, the most significant energy exchange in continental Europe. EEX’s prices and possibilities often represent a reference in the electricity trade on the local or regional markets of European countries. The work also shows and deliberates on the occurrence of negative prices on the EEX electricity spot market at the end of December 2008. The negative price, when predicted and allowed in the market model structure at the energy exchange, mirrors the situation on the market in which the offer has significantly exceeded the demand. Although the achievement of the negative price on the electricity market is more of an exception than a rule, it is interesting to contemplate the reasons for such an unusual occurrence. Since its introduction onto the EEX, the negative market price has been achieved only a few times, mostly in particular hours at night when the consumption of electrical energy is normally reduced. The situation analysed in this work is interesting because the negative price was achieved in the period of a few successive hours and because of the achieved amounts of the negative price, so the work contemplates on possible causes which led to such a situation. Since European electrical power systems are well connected, an analysis has been performed and the work presents how the observed occurrences in western and middle Europe have impacted electricity flows in the Croatian electrical power system and its surrounding.