Our current electricity system is based primarily on coal-fired power stations and natural gas fired power stations which cannot be turned on and off at short notice.

By generating power during times of peak demand (daytime) entails generating power during off-peak times (night-time), even if there is no demand for that power at a price that covers average costs.

Here we have a base load supply, which easily exceeds the demand for off-peak power at average cost, and sometimes even at fossil fuel cost. The result is that off-peak power must be heavily discounted, and even so, demand is barely enough to keep the turbines turning. Therefore, there is a loss of energy during the off-peak period which is reflected in the graph below: