Negative electricity prices

Solar is the cheapest source of energy, but only when it is available. When the Sun doesn’t shine, there is no solar energy. And there can be too much. The cost of solar power and electricity storage is dropping, so renewable energy may, at some point, overtake fossil fuels as an energy source. But is it economically feasible? Electricity prices in the Netherlands fall below zero for most of the day on sunny, windy summer weekends. In 2023, electricity prices reached a negative €0.40 per kilowatt-hour on a few occasions. Taxes and delivery costs were €0,15, so you could make money using electricity in those instances. As one energy expert put it, ‘This is nuts.’¹ Since then, shutting down solar and wind farms during peak hours has helped keep prices in check.

The Netherlands has significant solar and wind capacity, yet also often-changing weather, limited battery storage, and a stressed power grid. In 2022, 40% of the Netherlands’ electricity and 15% of its total energy consumption came from renewable sources. Plans are in place for additional wind and solar farms. To manage all that, you need large batteries to store electric energy, as well as nuclear power plants or plants that run on fossil fuels to bridge periods with little sun and wind. It will be costly, so investors are starting to have second thoughts, putting the plans for new wind farms in jeopardy. The Dutch might be better off by curbing their energy use. Only, no one dares to propose that.

In the drive to reduce carbon emissions, households are increasingly electrifying their energy use, adopting electric heating and electric cars, which is resulting in higher winter electricity demand and further strain on the grid. There is only so much shifting of energy demand that flexible pricing can achieve. Businesses can’t start or expand due to a shortage of grid capacity. That is also because the Netherlands is an international hub for data centres. They will require an increasing amount of energy, likely over 10% of Dutch power consumption by 2030. Power outages during peak hours, once unthinkable, become possible. Further down the road, the Dutch might end up shutting down energy-intensive industries during periods of renewable energy shortage.

The costs of halting climate change will be staggering, so some say renewable energy is a religion. Critics had a field day in 2023 when the Dutch Climate Minister said that the proposed measures to combat climate change would cost €28 billion over seven years, or €222 per person per year, and reduce global temperatures by only 0.00036°C. ‘This is nuts,’ they said. New estimates indicate that the combined national plans, if executed, will reduce the increase in global temperatures from 4.0°C to 2.5°C this century, which is not enough. The first part was the easiest. The second part could run into a cost wall, even if the price of solar energy itself nears zero. Something has to give. The climate is warming, but the costs are becoming prohibitive. We believe economic growth should fund the switch, which is thinking that the problem, growth, is the solution.

Sri Lanka’s organic farming disaster

In the spring of 2021, Sri Lankan farmers went organic overnight. It was not their choice. The government had banned synthetic fertilisers and pesticides, a move intended to save Sri Lanka $ 400 million a year and protect Sri Lankans from the adverse health and environmental impacts of these substances. It led to a 20% fall in rice and tea production. The price of rice rose by 30%, and the prices of vegetables like tomatoes and carrots rose by 400%. It was another blow to a tourism-dependent economy already devastated by the coronavirus pandemic. After five months, the government made a U-turn and reduced the restrictions. By mid-2022, the economy had gone into free fall. Inflation was above 50%, with 90% of Sri Lankans missing at least one meal per day.² Some say organic farming is a religion.

Synthetic fertilisers make crops grow faster. Pesticides control insect infestations and diseases that destroy crops. Their adoption since the 1960s, known as the Green Revolution, has helped lift countries like Sri Lanka out of poverty. In Sri Lanka, rice yields tripled. Synthetic fertilisers and pesticides, however, ruin our health and the environment. Soil degradation endangers our food supplies. Still, discontinuing the use of fertilisers and pesticides can lead to famine. So, can organic farming feed the world?

There is also the issue of agricultural subsidies. In developed countries, governments subsidise farmers to purchase fertilisers and fuel their tractors. Of the total energy in maize produced in high-input agriculture, about 70% comes from fossil fuels. The manufacture of chemical fertilisers takes more than 30% of this energy. Cleaning the groundwater from excess fertiliser nitrates may be so costly that it will be impossible.³ When these subsidies disappear, less intensive farming methods become more economical. Yet, that will reduce the food supply, and make food more expensive, and poor people can barely afford it already.

Organic farming requires twice as much land for the same output. There could be ten billion people by 2050, so the world’s farmers may need to increase their production even further. That is, unless we stop breeding and change our diets. Livestock use nearly 80% of global agricultural land, while producing less than 20% of our calories.⁴ Holy cow! Meat and dairy are also a religion. By reducing our meat and dairy consumption, we may feed the world through sustainable, or even organic, farming methods.

Goodbye, fossil fuels?

Fossil fuels provide 80% of humanity’s energy consumption. Perhaps you have heard tales about phasing out fossil fuels, that solar is the cheapest source of energy, and that it will all be nice and dandy with solar and wind. A 2021 International Energy Agency (IEA) projection of future energy use tells a different story. The IEA expected a 30% increase in world energy use between 2020 and 2050. Renewable energy will not even fully cover that increase.⁵ It is the reason Big Oil keeps drilling. And so, saying goodbye to fossil fuels and switching to renewable energy begins with reducing global energy consumption by 50%, and that will require drastic lifestyle changes.

The IEA concludes that the pledges by governments to date—even if fully achieved—fall well short of what is required to bring global energy-related carbon dioxide emissions to net zero by 2050 and give the world a 50% chance of limiting the global temperature rise to 1.5 °C.⁶ The IEA presented a plan to achieve net-zero carbon emissions by 2050. It bets on cheaper solar energy and technology to store it. Achieving 50% renewable energy use may be feasible, but beyond that, the costs may become prohibitive if the betted-on technologies don’t arrive on time. We are about to find out.

A global power grid could make switching to renewable energy feasible, as it would require less spare capacity and batteries. Long-distance electricity transport incurs limited losses (26% per 10,000 kilometres). It might be profitable to transport electricity over thousands of kilometres from locations with predictable solar availability to other locations. It is mainly a political problem as nation-states have conflicting political objectives, so it requires a global government. We may have already surpassed the 1.5°C global average temperature rise, at which point things supposedly become critical. Due to the measures already taken and planned measures, the expected temperature rise may be limited to 2.6°C by 2100 AD, significantly less than the worst-case scenario of a 4°C rise.

What is our religion?

Once we accept a story, it becomes a matter of faith, whether it is true or not. When the Dutch began electrifying their energy consumption, few foresaw that they might end up with power shortages requiring businesses and consumers to adapt to electricity availability. And there are extreme situations, like no Sun and no wind during winter, when energy demand is at its highest. So far, the consequences have remained limited. The Sri Lankans suffered much more from their sudden switch to organic farming. We would accept the consequences if we believe our choices are right. Your future and your children’s are on the line. We don’t know the future, so our choices are a matter of faith.

In the Middle Ages, most Europeans were dirt poor. Their houses were mere sheds. Still, they built magnificent cathedrals. God was more important to them. Were they right, or were they wrong? Today, money is our religion. Whether to switch to renewable energy or organic farming has become an economic calculation. Yet you cannot serve both God and Mammon? Renewable energy and organic agriculture are choices of faith, but so are the alternatives. They can go wrong as well, and probably will. We can never be sure that we make the right choices. We can only do the best we can using the information we have. And if we live in a scripted reality, we can only play our assigned role.

Latest revision: 19 June 2026

Featured image: The Lady Chapel of Exeter Cathedral. User Diliff. Wikimedia Commons.

1. ‘This is nuts:’ European power prices go negative as springtime renewables soar. Joshua S Hill (2023). Renew Economy. [link]
2. Sri Lanka’s organic farming disaster, explained. Kenny Torrella (2022). VOX. [link]
3. Can conventional agriculture feed the world? Pablo Tittonell. Wageningen University.
5. How much of the world’s land would we need in order to feed the global population with the average diet of a given country? Hannah Ritchie (2017). Our World In Data. [link]
5. EIA projects nearly 50% increase in world energy use by 2050, led by growth in renewables. EIA (2021). [link]
6. Net Zero by 2050: A Roadmap for the Global Energy Sector. IEA (2021). [link]