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derrasterpunkt | 1 year ago

It is because of merit order. The most expensive generator of energy sets the price for all the energy.

https://en.wikipedia.org/wiki/Merit_order

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order

benjymo|1 year ago

If rates go negative this isn't relevant.

You can get dynamic contracts based on the day ahead price in Germany. You pay a negative price for the electricity there. You still have to pay a transmission fee and taxes, so the actual end price is almost never negative though.

Of course sometimes you also pay much more than normal contracts.

Also without merit order, you'd still pay close to the most expensive source on the spot market. It's a consequence of the open grid where demand and supply has to match and price is not fixed.