CAISO Cuts Negative Day-Ahead Price Frequency to 7.7% in 2025
Updated
Updated · Energy Institute Blog · Jun 29
CAISO Cuts Negative Day-Ahead Price Frequency to 7.7% in 2025
1 articles · Updated · Energy Institute Blog · Jun 29
Summary
CAISO’s 2025 market monitor report showed negative prices in the day-ahead market fell to 7.7% of intervals from 8.8% in 2024, with declines also recorded in the 15-minute and 5-minute markets.
Battery storage growth and the wider western Energy Imbalance Market likely helped absorb excess solar and wind output that typically drives negative prices during low-demand spring midday periods.
CAISO’s newly launched Extended Day Ahead Market could further reduce negative intervals by coordinating generation schedules across western utilities and limiting inflexible fossil-fuel output planned a day earlier.
The report argues the biggest unrealized benefit remains on the demand side, because most retail customers still cannot access negative wholesale prices to shift EV charging or industrial use into those periods.
Beyond California power markets, negative energy prices remain more extreme in West Texas gas markets, where Waha Hub prices averaged minus $2.19 per mmBTU through mid-June amid pipeline bottlenecks.
With energy prices turning negative, why are household electricity bills still rising?
As negative prices spread globally, is our energy system failing the green transition?
Can the massive energy demand from AI actually help stabilize the renewable-powered grid?
Navigating Negative Day-Ahead Prices: CAISO’s 2024-2025 Challenge and the Future of Renewable Grid Integration
Overview
This report explores how CAISO managed the growing challenge of negative day-ahead electricity prices in 2024-2025. Negative prices became common due to a complex interplay of supply and demand, especially when abundant solar and wind generation coincided with low electricity demand. Generators often preferred to pay to keep producing rather than shut down, as stopping and restarting can be costly. Despite having the technical ability to curtail renewables, negative prices persisted, highlighting the operational and economic complexities CAISO faced. The report details how these dynamics shaped market strategies and the ongoing need for flexible solutions.