Wholesale electricity prices declined further in many countries in 2024, following the sharp contractions in 2023. This downward trajectory largely tracked the fall in global energy commodity prices, but in some regions local market issues dictated diverging trends. The European Union, India, the United Kingdom and the United States all posted around 20% lower wholesale electricity prices on average in 2024 compared to previous year. Nevertheless, prices in these regions, with the exception of the United States, are still significantly above the pre-Covid levels. 

Though still relatively uncommon in many power markets on a global basis, some regions are seeing an increase in the occurrence of negative wholesale prices in recent years. There are various reasons why negative prices may emerge in some markets where they are allowed, but broadly they signal a lack of flexibility in the system due to technical, regulatory or contractual reasons, particularly during times of low electricity demand and abundant electricity generation. The magnitude and duration of negative price occurrences vary across countries and regions, as they are subject to market conditions.

In South Australia, negative prices accounted for about 25% of the hours on average annually in both 2023 and 2024. Across the world in southern California, the share of hours with negative prices surged to 15% in 2024, up from only 4% a year earlier. The number of hours with a negative wholesale electricity price has been increasing in Europe since 2022. Finland led the continent with the highest number of negatively priced hours in 2024, at 8% of the time (700 hours). Similarly, the occurrence of negative prices in Sweden rose from 5% in 2023 to 7% in 2024, in the Netherlands from 4% to 5%, and in Germany from 3% to 5%. 

Despite the growth trend, most European markets had negative electricity prices less than 5% of the time in 2024. In other markets across the world where regulations allow negative electricity prices, this share is even less. For example, in Houston, Texas it was slightly above 1% in 2024, while in some parts of Mexico it was less than 1% on average.

Even though negative prices are becoming more common, compared to the average wholesale electricity prices, they have generally remained largely within a moderate range of USD -1/MWh to USD -30/MWh, with extreme low prices rare. In 2024, for example, they averaged USD ‑2/MWh in Finland, USD -7/MWh in Houston, Texas, USD -12/MWh in Germany, USD -25/MWh in Victoria and USD ‑30/MWh in South Australia. However, the vast majority of negative prices were only slightly below zero in most regions. For comparison, the average wholesale electricity price in 2024 in Victoria was USD 80/MWh and in Germany around USD 85/MWh.

Negative prices are not yet a dominant feature in most markets, but their strong growth trend in various regions in recent years is highlighting the growing need for more flexibility in electricity supply and demand. Negative prices can serve in some cases as an incentive for the adoption of storage solutions and demand-side response. However, negative prices alone may not suffice for increased system flexibility. Adequate regulatory frameworks, market designs and tariff structures are essential for flexibility in the system.