If you are on Agile Octopus, you already know the answer from experience. A storm rolls in, you check the app, and your prices have fallen through the floor. Sometimes below zero. Here is why that happens.

The UK grid runs on supply and demand

Electricity prices on the wholesale market move in real time based on how much power is being generated versus how much is being used. When supply is high and demand is low, prices fall. When demand outstrips supply, prices rise.

It is the same basic principle as any market, just playing out in 30-minute windows across the national grid.

Wind turbines cannot be switched off easily

The UK has a lot of wind capacity, both onshore and offshore. On a stormy day, those turbines are generating at full power whether the grid needs it or not. Unlike a gas power station, you cannot simply turn the wind off.

When a storm hits overnight or on a quiet Sunday morning, you can have enormous amounts of electricity being pumped into the grid with relatively little demand to absorb it. The price has nowhere to go but down.

Wind Turbines

Sometimes down means negative

When supply genuinely overwhelms demand, the wholesale price can go negative. Grid operators and generators are effectively paying people to use electricity rather than having to deal with the surplus.

On Agile Octopus, that negative wholesale price gets passed straight to you. The app sends a plunge pricing alert, the bars on your chart dip below zero, and suddenly running your washing machine is earning you money rather than costing you.

Why the North East sees it more

Wind generation tends to be stronger in the north of the UK. Living in County Durham, I see plunge pricing events fairly regularly during stormy weather. The grid is awash with power from offshore and onshore wind farms and demand in the early hours or on a weekend morning is not enough to mop it up.

It is one of the reasons Agile Octopus suits people in this part of the country particularly well.

The bottom line

Wind and electricity prices are directly connected. The next time a storm is forecast, check your Agile app the evening before at 4pm when tomorrow’s prices drop. There is a good chance you will see cheap or even negative rates during the windiest windows.

That is your cue to run the dishwasher, put a wash on, and charge everything in the house. If you are not on Agile yet, use my referral link and we both get £50 credit to get started.

Photo by Nicholas Doherty on Unsplash