In recent years since 2024, the phenomenon of “negative electricity prices” has been spreading across various regions in China. Recently, multiple media outlets reported that zero and negative electricity prices have gradually shifted from being occasional to becoming normalized in several areas in China in 2025. Experts point out that the common cause of negative electricity prices appearing in different regions is due to an excess of electricity supply. Behind this surplus supply lies the bitter fruit of blind promotion of new energy power development by various levels of the Chinese Communist Party (CCP) government.
According to reports by “Southern Energy Watch” and “Huaxia Energy Network” on Monday (November 10th), with the continuous growth of new energy installations and their comprehensive entry into the market in China, as well as the widespread deployment of the electricity spot market since 2024, zero and negative electricity prices have gradually become normalized.
Electricity spot trading refers to the overall activities of electricity trading conducted through spot trading platforms for the next day, intraday, or real-time dispatch within a short period.
Data shows that in 2019, Shandong Province experienced negative electricity prices for the first time at -0.04 yuan/kWh, followed by 21 continuous hours of negative prices in 2023 and 22 hours during the “May Day” period in 2024. In January 2025, Zhejiang reported two consecutive days of pricing at -0.2 yuan/kWh, while in April, the lowest reported price by the Mengxi Power Grid was -0.004 yuan/kWh.
Especially in Sichuan Province, on September 20th and 21st of this year, the Sichuan electricity spot market experienced negative prices for the entire day for two consecutive days, with real-time average prices reaching -0.0487 yuan/kWh and -0.0493 yuan/kWh, and all 56 time slots reaching the lower limit price of -0.05 yuan/kWh.
The most severe situation is in Shandong, where the number of hours with negative electricity prices has almost reached 1000 hours in both 2023 and 2024, and it is expected to exceed 1000 hours in 2025. This is more than twice the number of hours with negative electricity prices in Germany, which is known for its severe cases of negative pricing.
Associate Professor Guo Hongye from the Department of Electrical Engineering at Tsinghua University revealed in a written interview with the “Daily Economic News” that by 2024, the proportion of time with negative electricity prices in Shandong’s day-ahead market and real-time market was approximately 11% and 14%, respectively.
Negative electricity prices here refer to the price of electricity determined in the electricity spot market through competitive bidding between buyers and sellers (power generation companies and electricity consumers) when the supply and demand reach a balance. This price ensures that the quantity of electricity willing to be purchased equals the quantity willing to be sold in the market.
Zhang Yanqin, Deputy Director of the Market Supervision Department of the National Energy Administration, recently stated in a press conference that “negative electricity prices may occur more frequently.” An article on “Huaxia Energy Network” believes that negative electricity prices are likely to occur more widely and frequently, making it almost inevitable. Guo Hongye also told reporters that “with the background of comprehensively promoting the marketization of new energy and canceling mandatory storage policies, the trend of the normalization of negative electricity prices may be difficult to avoid.”
Yin Ming, Director of the China Power Transformation Project at Bozhongzhihe Energy, stated in an interview with the “Daily Economic News” that the common cause for the occurrence of negative electricity prices in various regions is the surplus of electricity supply. However, due to different factors such as the power structure and climate conditions in different regions, the specific causes of supply exceeding demand vary.
By the end of July 2025, China’s total renewable energy installed capacity was over 2 billion kilowatts, accounting for more than 60% of the total installed capacity of electricity, of which the combined installed capacity of wind and solar power had reached 1.68 billion kilowatts, surpassing that of thermal power. However, the intermittent and unpredictable nature of solar and wind power makes them unable to respond in real-time to the needs of the power grid or users, leading to their lack of competitiveness in the electricity spot market, where they have become a “hot potato.”
Several interviewees speaking to “Southern Energy Watch” mentioned that the occurrence of zero or negative electricity prices during certain periods fundamentally reflects the structural contradictions in the power system under market conditions, stemming from the failure of electricity planning to achieve coordinated development among power sources, loads, and grids.
One interviewee pointed out, “During planning, there is often a unilateral pursuit of the scale and construction cost of a single type of power source, without fully evaluating the systemic balance costs, reserve costs, and capacity costs brought about by a high proportion of new energy integration. These hidden costs eventually manifest through price fluctuations in the spot market.”
In the recent five years, the growth rate of China’s electricity generation capacity has significantly exceeded that of GDP, leading to inevitable overcapacity in power generation. According to data from the Chinese National Energy Administration and the Statistics Bureau, from 2019 to 2024, while China’s GDP grew annually by an average of 6.4% (given historical underestimation of GDP growth due to the CCP’s data manipulation, the actual growth rate is likely lower), electricity consumption increased from 7.23 trillion kWh to 9.85 trillion kWh, also growing by an average of 6.4% annually. However, China’s total installed power generation capacity increased from 2.01 billion kilowatts to 3.35 billion kilowatts, averaging an annual growth of 10.8%.
Behind the blind development of new energy power lies various forms of government subsidies. On November 6th, Zhong Jieneng Solar Energy Co., Ltd. released an announcement disclosing that from January to the end of August 2025, its subsidiary photovoltaic power generation project company received a total renewable energy subsidy fund of 2.319 billion yuan, with 2.252 billion yuan coming from the national renewable energy subsidy fund.
On September 5th, Jinko Solar Technology announced that in August 2025, its subsidiary photovoltaic power generation project company received a total renewable energy subsidy fund of 646 million yuan, with 633 million yuan being from the national renewable energy subsidy fund.
Furthermore, Goldwind New Energy also disclosed that in August 2025, its subsidiary power generation project company received a total renewable energy subsidy fund of 939 million yuan, all of which came from the national renewable energy subsidy fund.
Local government subsidies for photovoltaic power generation are also widespread. According to public reports, the Xi’an New District in Shaanxi Province provided subsidies of 0.25 yuan/kWh for grid-connected projects from 2019 to 2020, and 0.1 yuan/kWh from 2021 to 2023. Hangzhou Xiao Shan District in Zhejiang Province offered a subsidy of 0.2 yuan/kWh for distributed projects on enterprise roofs with an installation capacity of over 30 kW for a consecutive period of 60 months, with a cap of 1 million yuan per project. Beijing provided a subsidy for distributed photovoltaic projects based on electricity usage type, lasting for a period of 5 years.
In a summary of a work conference in a central state-owned enterprise in 2024, nearly 40% of newly added new energy projects in recent years failed to achieve the promised return on investment, with some projects continuously operating at a loss, some even incurring losses upon production, showcasing the situation of “increasing quantity but not profit” in the new energy sector.
An industry insider told the Huaxia Energy Network that the decrease in returns or even losses for solar power stations is due to multiple factors. In recent years, under the rapid increase in installations, various regions have issued policies such as time-of-day pricing, market participation of new energy, and power rationing and halts, all of which have targeted solar energy, causing numerous power stations to fall into unprofitable situations.