Analysis of negative power prices due to oversupply of solar and wind power with possible solutions.

A lot of wind and solar power is being generated. So much in fact that the market power price is increasingly negative during the day when there is excess supply. As a result, more and more generation plants are being switched back.

At these times, renewable energy generation exceeds demand, with insufficient ability to export excess power to neighboring countries.

Read on for more insight and background, an outlook and possible solutions how to deal with the negative power price for your solar or wind installation:

Development of negative imbalance prices & EPEX 2025
Dunkelflaute
Development of negative imbalance prices & EPEX 2024
Electricity generation and renewable energy in 2024
Outlook negative prices 2024-2026
European developments: negative prices & supergrid
Solutions to negative pricing
Annual review 2023 negative prices imbalance market
Renewable energy Netherlands 2023
Retrospective negative prices from 2019
Opinion COMCAM

Development of negative imbalance prices & EPEX 2025

Imbalance market

Imbalance trading responds to real-time needs and fluctuations in the electricity grid. Imbalance represents the difference that occurs between predicted and actual supply and demand on the electricity grid. This difference can be caused by unexpected changes in weather, power plant failures or sudden changes in renewable energy generation or consumption.

Grid operators must quickly correct this imbalance to ensure that the electricity grid remains stable. Prices in this market can fluctuate widely depending on the shortage or surplus of electricity. With continued growth in the amount of renewable energy generated and the electrification of transportation and business processes, imbalance is expected to increase over the next decade.

Temporary delay in imbalance data Tennet from Dec. 3, 2024

TenneT has decided to provide imbalance market participants with data every five minutes instead of every two minutes. The grid operator took that decision because it has recently seen too many fluctuations on the national power grid, including from batteries trading in energy.

The grid operator has been struggling with large and rapid fluctuations for quite some time, which can also be seen in the high number of quarters when control state 2 occurs. Control state 2 occurs when there is both a surplus and a shortage of electricity on the grid within a quarter-hour period. This often happens because large power producers, such as solar or wind farms, quickly adjust their production to match the current imbalance prices.

The measure goes into effect on December 3 starting at 9 a.m. It is a temporary measure, valid for at least six months. This should limit fluctuations in the frequency of the power grid. Tennet’s goal is to be able to go back to the current “delay” as soon as possible.

Negative price hours 2025

In the imbalance market, there were 154 negative price hours through February 2025. This is 89 fewer than in the first 2 months in 2024. March also got off to a quieter start with 27 negative price hours through March 14.

Due to the temporary delay of imbalance data, Tennet expects fewer fluctuations on the power grid. This temporary arrangement is from December 3, 2024 to June 3, 2025.

In 2024, there were a total of 2,145 negative hours in the imbalance market.

EPEX market (day-ahead)

Day-ahead prices are a forecast of electricity prices for the next day. The EPEX spot prices showed negative hourly prices for the first time this year in the first sunny weekend at the start of March. Through March 18, there are already 30 negative price hours, up from 17 hours in all of March 2024.

Sunshine hours will increase in the coming period. The sun higher in the sky with a better angle of radiation will start to cause more negative hourly prices in the day-ahead market.

Every year the number of negative prices begins to increase earlier in the year. This year it is a little later than last year due in part to the dunkelflaute period last period. Read more about this later in this article.

In the coming period, we will see how steep the negative price curve will be this year.

In 2024, there were a total of 458 negative hours in the EPEX market.

Dunkelflaute

In the first months of 2025, Europe experienced several periods of “dunkelflaute,” characterized by low wind and solar energy production. These periods occurred mainly in January and February and typically lasted several days to weeks. During this period, cold, cloudy and windless weather resulted in increased demand for gas and electricity.

When dunkelflaute strikes, energy prices rise with the following consequences:

– greater reliance on gas-fired power plants increases costs

– the stability of the power grid comes under pressure

– market volatility puts pressure on buyers.

These conditions highlight the need forflexible energy solutions and reliable backup systems to ensure grid stability during periods of low renewable energy production.

In general, dunkelflaute events occur 2 to 10 times a year in Europe. Mainly between October and February, with a total duration of 50 to 150 hours per year. Individual events usually last less than 24 hours. Longer periods of more than two days occur about once every five years.

Development of negative imbalance prices & EPEX 2024

Imbalance market

In the imbalance market, there were 2,145 negative price hours in 2024. That is an increase of 440 hours compared to 2023. There was a lot of volatility in 2024 resulting in more extremely cheap hours as well as more extremely expensive hours than previous years.

There were only 89.5 negative price hours in November, the lowest number of hours per month this year. This month, the Netherlands experienced a period of low solar and wind, also known as a“dunkelflaute.” This low production of solar and wind energy increased dependence on fossil fuels. TenneT had to deploy more emergency power to keep the grid stable. As a result, imbalance prices were higher than normal this month.

Due to the temporary delay of imbalance data, Tennet expects fewer fluctuations on the power grid. This temporary arrangement is from December 3, 2024 to June 3, 2025.

In 2023, there were a total of 1,705 negative hours in the imbalance market.

EPEX market (day-ahead)

Day-ahead prices are a forecast of electricity prices for the next day. In 2024, there were a total of 458 negative price hours in the day-ahead market. An increase of 144 hours compared to 2023.

In 2023, there were a total of 314 negative hours in the EPEX market.

Negative prices in 2024 do average less negative than previous years.

Switching off at negative prices

At negative price moments and at zero prices, more and more generation plants are switched back due to oversupply and grid congestion. The total amount of electricity switched off is estimated at over 3 terawatt-hours for 2024 , 3 times more than in 2023.

The amount of generation capacity shut off is only likely to increase. This is because a lot of wind and solar capacity will be added in the coming years. Power demand is expected to grow at a slower rate. Read more here.

Starting in 2025, the EPEX will start working with quarter-hourly prices instead of hourly prices. What does this mean?

Electricity generation and renewable energy in 2024

Prime 2024: more than half green power

Of all power produced, 54.2% was green by 2024. The share could have been 56.5% without turning off wind turbines and solar panels. The total amount of electricity switched off is estimated at over 3 terawatt hours for 2024 , 3 times as much as in 2023. If all this surplus had been stored for later use, another 250 million cubic meters of natural gas would have been saved, according to data from Energieopwek.

Growth over all of 2024 was 11%. Electricity production from wind turbines (+14 percent) and solar panels (+15 percent) contributed to this in particular. The main reason is that 2 offshore solar parks came into production and the number of installed solar panels continued to grow.

By 2024, solar panels provided 20.5% of all power needed, onshore wind turbines 14.9%, offshore wind 12.6% percent and biomass 6.1%.

In 8 of the 12 months, green power production was above 50%. April was the best month at over 68%. Windless and gray November was the worst month at 38% percent. This was also the only period when renewable energy production fell slightly compared to the same month last year.

Coal and gas increasingly less needed to generate electricity

Electricity production from burning coal and natural gas has declined by nearly 40 percent over the past five years. By the end of 2024, there was less wind and solar, requiring some more supplemental fossil fuel.

The use of fossil fuel such as coal and natural gas to generate electricity is decreasing since 2019. This reduces greenhouse gas emissions.In 2024, the reduction in electricity generation is 5% if coal is used, and 4% if gas is used. This decrease is somewhat smaller than in previous years.

Renewable sources such as solar, wind and biomass accounted for about half of electricity generation, 10% more than in 2023. In the sunny months of May through August, solar accounted for about one-third of total electricity production. In the winter months, more than a third of the energy produced came from wind power. The sharp increase in renewable energy is due in part to the development of gas prices. Since the Russian invasion of Ukraine, energy prices have risen sharply, making a renewable alternative even more attractive.

The rapid rise of solar and wind power, especially offshore, will continue in the coming years. This will cause increasing volatility, both on day-ahead and intraday prices and on imbalance prices.

Electricity and gas imports and exports 2024

The Netherlands imports and exports electricity with neighboring countries and exported about 4,200 GWh net in 2024. Most of it was exported to Belgium. The United Kingdom was also a net importer through the BritNed cable. Imported electricity came mainly from Norway and Denmark.

Gas consumption 2024
Gas demand is about 25% lower compared to the average gas consumption before the energy crisis (during the years 2019 to 2021),as in 2023.

In the graph below, gas consumption is broken down by industrial gas consumers, gas-fired power plants and local gas distribution to small businesses and households. The largest decrease can be seen in power plants, caused by the growing share of renewable energy generation. Among small businesses and households, gas consumption has fallen by about 25% due to savings and electrification (the process of replacing non-electric systems and appliances with electric variants). Industrial gas demand fell by just over 20%.

Gas imports and exports
Because gas production from the Groningen gas field has stopped, the Netherlands has become dependent on gas imports. But in addition, the Netherlands also plays a major role in Europe’s gas traffic circle. The gas traffic circle is a coordinated whole of gas infrastructure for transport, storage and transit of gas. The chart below shows gas imports and exports in 2024. Imports came mainly from Norway and through LNG terminals. An LNG terminal is a plant that converts liquefied natural gas coming to Eemshaven by ship into gaseous natural gas. Gas exports were mainly to Germany.

Outlook negative prices 2024-2026

Negative hours will continue to increase due to further growth in renewable energy, higher electricity demand due to electrification and the phasing out of more flexible power plants.

By 2026, negative hours will possibly triple compared to 2023. During peak hours mainly due to a lot of solar generation during those hours and during off-peak hours due to wind generation and lower demand. Negative prices will cause more volatility both on the day-ahead, intraday and imbalance markets.

Increasing demand through electrification together with more deployment of energy storage in battery and via electrolysis will have a dampening effect on the number of negative hours. This is because both technologies can be flexibly deployed precisely at the times of excess supply from wind and solar.

European developments: negative prices & supergrid

More and more European countries are seeing an increase in negative electricity prices, due to the large-scale green energy push in the region. This shift is fueled by an abundance of supply, the result of significant investments in green infrastructure, such as solar panels and wind turbines.

Source: Montel

Despite the growth trend, most European markets had negative electricity prices less than 5% of the time in 2024.

Europe installed a record number of new solar panels by 2023, with the goal of reducing dependence on natural gas. This move followed the rise in natural gas prices in 2022, when supplies were interrupted by Russia. Negative hours will continue to rise due to continued growth in renewable energy, increased electricity demand from electrification and the phasing out of more flexible power plants.

By 2026, the number of negative hours could triple from 2023. During peak hours, this increase is mainly caused by abundant solar generation, while during off-peak hours wind generation and reduced demand play a role.

Below is the number of negative hours in 2023 by country on the day-ahead (EPEX) with the main cause.

Overcrowded power grid in more and more European countries

The power grid is becoming congested in more and more European countries. Network operators are failing to connect wind and solar farms to the power grid. Companies requesting a connection often end up on long waiting lists. Read more here.

European super grid

Continental Europe’s synchronous power grid is the largest in the world. It serves more than 400 million customers in 24 countries. The European Commission aims for an integrated European electricity grid that integrates renewable energy sources, supports electrification and increases energy security. There will be a regulatory framework to make the European electricity grid ready for this. All cross-border – from planning to legal – bottlenecks will be identified. The European Investment Bank will provide additional funding for this future-proof energy system, the EU supergrid.

Below is an overview of electricity flows between European countries in 2023.

Sources: CBS, Change.inc, EEX, Engie, Energieopwek.nl, ICIS Analytics, National Energy Dashboard, Montel, Solar Magazine, Stratergy, Tennet, Tweakers.

Solutions to negative pricing

Because small-scale consumers can still make use of the balancing system for the time being, a negative electricity price has no consequences yet. However, business owners with a large-consumption connection who supply power back at times with a negative electricity price will have to pay for this.

Possible solutions in this situation to deal more intelligently with oversupply may include:

Please note that under the SDE+(+) subsidy scheme, no subsidy is paid for the hours when there is no production. There are also then no guarantees of origin (GOs) that can be sold to customers who want green electricity.

For a continuous period of 6 hours or longer with a negative price, no subsidy and no GvOs will be paid anyway.

Annual review 2023 negative prices imbalance market

Below is an overview of the settlement prices on the imbalance market in 2023 per MWh. The prices listed are bare prices, i.e. excluding supplier mark-up or markdown.

Annual review 2023 on negative power prices

A new price record from – €1,449 per MWh to €1,852 per MWh on the imbalance market due to a lot of wind variation. This was during the week of Oct. 27 to Nov. 2.

July and August were not top months due to high cloud cover and precipitation. As a result, fewer hours with negative prices.
On Sunday, July 2, the first low in 2023 with a price of – €500 per MWh. On this Sunday the price was negative for fifteen consecutive hours. A new record since April 2020.

Other records in July: the power price remained at – €500 per MWh for three hours and for the first time a negative hourly price between 6 p.m. and 7 p.m. ‘s.

In June, there were 140 hours of surplus power. Nevertheless, solar panels or wind turbines did not always have to be switched off, because a lot of electricity was also exported to neighboring countries at those times. This limited the negative electricity prices in the Netherlands that arose.

May was a record-breaking month. By midday on Pentecost Sunday, negative power prices were even in almost all of northwestern Europe, from Finland to France. The exception was England. There, too, solar and wind are set to expand in the coming years.

Negative power prices traditionally occur most often in the spring. During these months, solar panels generate a lot of power, while it is also relatively windy compared to the summer months.

Before 2023, negative prices occurred occasionally on weekends or holidays.

Renewable energy in the Netherlands 2023

In 2023, 21 billion kWh of electricity was generated from solar power, an increase of 24%. From biomass, 7.0 billion kWh of energy was generated, 1.7 billion less partly because less biomass was fired in coal-fired power plants. Electricity production from fossil sources decreased. Never before was so much electricity exported.

The Netherlands produced 13% more renewable energy in 2023. In power generation, almost half of it is renewable, with solar panels providing the most renewable power.

Electricity production from renewable sources increased to 57 billion kWh in 2023. Electricity production from wind power increased by 35%. This growth is partly due to the increase in the installed capacity of onshore and offshore wind turbines (+ 11 GW).

In 2023, 48% of electricity production came from renewable sources In the period from May to July, more than half of the electricity was renewable, even 57% in July. Production from renewable sources increased 21% in 2023. In the last quarter, wind power was the biggest driver of this growth.

The rapid rise of solar and wind power, especially offshore, will continue in the coming years. This will cause increasing volatility, both on day-ahead and intraday prices and on imbalance prices.

Electricity exports rise to record high

A record 25 billion kWh of electricity was exported in 2023, up 10% from 2022. Most of it went to these countries:

Germany : 10 billion kWh (+13%), due in part to the closure of the last German nuclear power plant
Belgium : 8 billion kWh
United Kingdom : 4 billion kWh (+18%)

In 2023, total electricity imports increased 5% to 19 billion kWh. Imports from Norway increased the most (1.1 billion kWh) due to higher production from Norwegian hydropower plants.

On balance, more than 5.7 billion kWh of electricity was exported in 2023. This is the second year in a row that, on balance, more was exported than imported.

Retrospective negative prices from 2019

The growth in storage – including batteries and electrolysers – and more power consumption through electrification is not keeping up with the growth in renewable supply. This will cause the number of hours with negative power prices to continue to grow.

The growth in 2023 comes from a growth in supply of solar and wind power, but also from a decrease in electricity demand. Electricity demand fell 5% in 2023 after years of being constant.

The prices listed are bare prices, i.e. excluding supplier’s markup or markdown.

Opinion COMCAM

COMCAM can advise you on an appropriate solution for your situation.

If you are considering investing in solar or wind energy, make sure that the expected generation matches your expected annual consumption as closely as possible.

Sources: CBS, Change.inc, EEX, Engie, Energieopwek.nl, ICIS Analytics, National Energy Dashboard, Montel, Solar Magazine, Stratergy, Tennet, Tweakers.