European power prices drop far below zero as solar output surges

The phenomenon of negative prices has become a regular occurrence over the past few years across Europe

A man washes off a solar panel system. Solar energy production typically soars in April with longer and sunnier days.

Power prices across Europe plunged deep below zero over the weekend as sunny weather boosted output from the region’s growing fleet of solar parks.

The phenomenon of negative prices has become a regular occurrence over the past few years in the region, but levels far below zero are still unusual. In March, the number of negative hours doubled in Germany from a year earlier, according to Epex Spot SE data.

Solar energy production typically soars in April with longer and sunnier days. That, combined with a dip in heating demand, pushes prices lower. The drop well below -€100 per megawatt-hour highlights the absence of large-scale battery storage in Europe to ease the supply-demand imbalance.

Excess renewables output can be counterbalanced either by shifting demand from peak times to midday or by storing the electricity. Some new solar farms are built with a battery to head off this problem but more investment is needed.

In Belgium, rates dropped to as low as -€266 per megawatt-hour on Sunday. In the Netherlands, prices fell to -€189.90 and they plunged to -€129.81 in Germany, according to Epex.

Contracts for the next month fell 2.8% to €65.95 per megawatt-hour on the European Energy Exchange AG. Matthias Apel, an analyst at industry consultant Ispex AG, attributed the drop to the latest change in weather forecasts, with cooler temperatures seen at the start of May.

“This will likely be accompanied by higher wind generation,” he said.

The European Union’s installed solar capacity roughly doubled between 2021 and 2024, particularly after the energy crisis highlighted the danger of relying on imported fossil fuels.

Bloomberg