Negative electricity prices
Wholesale prices below zero, when generators pay to deliver power because inflexible supply exceeds demand.
Negative electricity prices occur when the market clears below zero: producers pay to keep generating, and flexible consumers are paid to take power. They arise when inflexible or subsidised supply exceeds demand plus export and storage capacity.
Causes:
- Output-based support (some feed-in tariffs, production tax credits, older premiums) that rewards generation even at negative prices.
- Must-run plants: nuclear and coal with high restart costs or minimum stable load, CHP tied to heat demand.
- High solar and wind output during low demand, typically sunny spring weekends or windy holiday nights.
Frequency has risen sharply. Germany recorded about 301 negative hours in 2023 and 457 in 2024; Spain, the Netherlands, France and Finland also saw several hundred hours in 2024 to 2025. In the US, SPP, ERCOT West and CAISO see frequent negative nodal prices, partly because the production tax credit (about 27.5 USD/MWh) lets wind bid below zero. European day-ahead prices are floored at −500 EUR/MWh.
Responses include rules that suspend support during negative prices (Germany's EEG for new plants, EU CfD rules), more storage and electrolysers, flexible demand, interconnection and economic curtailment. Negative prices signal value for flexibility and reduce the capture value of solar, affecting PPA pricing.
Related terms
All terms →- Curtailment
Deliberate reduction of a generator’s output below what it could produce, usually wind or solar, because of grid, market or system constraints.
- Merit order
The ranking of power plants by ascending marginal cost, used to dispatch the cheapest units first and set the market clearing price.
- Day-ahead market
A wholesale electricity auction held the day before delivery that sets hourly or quarter-hourly prices and schedules for the following day.
- Duck curve
The shape of net load over a day in solar-rich grids: a deep midday dip as PV output peaks, followed by a steep evening ramp.
- Feed-in tariff
A policy that guarantees renewable generators a fixed price per kWh exported, usually for 15 to 20 years, independent of market prices.
- Variable renewable energy (VRE)
Renewable generation whose output varies with weather and time of day, mainly wind and solar PV, and cannot be fully dispatched.