The German Federal Grid Agency (Bundesnetzagentur) has published data on the development of wholesale electricity prices in 2024. One of the most noticeable trends is the increase in the number of hours with negative electricity prices. This phenomenon is a direct consequence of the increasing share of variable renewable energy sources (RES), such as wind and solar, in the country’s energy system.

Key figures for 2024

Hours with negative prices: 457 hours out of 8,784 (5.2% of the time).

For comparison: in 2023, there were 301 such hours (3.4%).

Lowest price: -135.45 EUR/MWh.

Average wholesale price:
7.851 cents/kWh (17.5% lower than in 2023).
Hours with prices above 10 cents/kWh:
Decrease from 4,106 hours in 2023 to 2,296 hours in 2024.

Why do prices go negative?

Negative electricity prices occur when supply exceeds demand. In Germany, this is due to several factors:

Consequences of negative prices

For the power sector: Negative prices break the economics of generation, making it less predictable and profitable.

They create risks for investments in new capacity, including energy storage and flexible power plants.

For consumers: Retail consumers generally do not directly benefit from negative prices, as tariffs are fixed.

However, dynamic tariffs linked to wholesale prices are beginning to be introduced in some markets.

For the grid: Negative prices highlight the need to develop energy storage systems and increase grid flexibility.

How to solve the problem?

Development of energy storage: batteries and pumped storage plants can store excess energy for use during periods of peak demand.

Flexible power plants: gas and biomass plants can quickly adjust output, which helps balance the grid.

Smart Grids: intelligent supply and demand management systems can minimize imbalances in the energy system.

Electricity market reform: introduction of mechanisms that encourage flexibility and reduce dependence on negative prices.

Conclusion

Negative electricity prices are both a symptom of success and a challenge for the energy transition. On the one hand, they indicate an increase in the share of renewable energy sources, which is important for decarbonization. On the other hand, they pose risks to the stability of the energy system and the economy of generation.

Germany, as a pioneer of the energy transition, is facing these challenges first. Its experience will be important for other countries that are also seeking to increase the share of renewable energy sources in their energy mixes.