Negative prices seem to me to be to be equivalent to fines for doing things that aren't socially useful. If they proliferate, that's a suggestion something is out of whack.
Negative prices seem to me to be to be equivalent to fines for doing things that aren't socially useful. If they proliferate, that's a suggestion something is out of whack.
Running parts of businesses at a loss isn't unheard of provided the governments responsible for overseeing it are OK with and/or mandate it (a wide variety of services to rural customers here in the U.S. comes to mind) and the impacted business makes up for the loss elsewhere.
A negative price seems fundamentally different than just running at a loss though.
In addition, there is probably some advantage to encouraging other parties to develop uses for cheap power as part of long term planning.
Of course as others point out nothing is every an ideal market.
But with something like wind, I think production is all or none, and switching back and forth is a bit slow. It’s more economical to pay a tiny amount to get someone to dump the power.
On a smaller scale, it’s common for off-grid hydro to have a giant heater waste power as needed.