If prices become negative on average, then there is no financial incentive for anyone to build a new power plant. Except if that plant can follow the load and generate only during the times when the prices are positive, and are above its breakeven generation cost. Natural gas power plants fall in that category. Battery storage too, twice better actually, as they can charge when prices are low or even negative, and discharge when prices are high.
One could claim that solar plus batteries is fine. Except that whoever plans to build solar plus batteries can quickly figure out that the ROI is even better if they do battery only and no solar at all. The same goes for wind.
The Economist ran a fairly informative article about this in September [1].
If prices become negative on average, then there is no financial incentive for anyone to build a new power plant. Except if that plant can follow the load and generate only during the times when the prices are positive, and are above its breakeven generation cost. Natural gas power plants fall in that category. Battery storage too, twice better actually, as they can charge when prices are low or even negative, and discharge when prices are high.
One could claim that solar plus batteries is fine. Except that whoever plans to build solar plus batteries can quickly figure out that the ROI is even better if they do battery only and no solar at all. The same goes for wind.
The Economist ran a fairly informative article about this in September [1].
[1] https://www.economist.com/finance-and-economics/2023/09/21/r...