The USA at least has multiple markets for electricity, even on the same grid. The day-ahead market prices electricity based on projections. This helps utility

The USA at least has multiple markets for electricity, even on the same grid. The day-ahead market prices electricity based on projections. This helps utility companies figure out how much to spin up peaker plants or maybe the local Pumped Hydro station the hours of the day they should release water to generate electricity. I don't think the day-ahead market ever goes negative. But the day-of market, maybe just an hour ahead of any particular time, needs finer balance that these big systems can't react to in time. This price of electricity the hour of use is often negative. It exists because yesterday's projection wasn't perfect and there is too much electricity on the grid right now. Some systems can react instantly, but if those instant reaction systems are all used up, it's cheaper to pay negative. -------- Ex: a hydro dam also is juggling the water needs of the community downstream. They cannot send too much, or too little water. They are already set on dropping 100 tons of water today at 10am and cannot change their plans. So someone else needs to catch all that electricity that will be generated from that event. You can't just 'not drop the water', because people downstream will not get their water.