Mitigating the Rise of Negative Power Prices in Europe
DECEMBER 2025
Mitigating the Rise of Negative Power Prices in Europe
Kevin Harrington, Director – Asset Operations at NTR
Negative power prices are becoming an increasingly visible feature of Europe’s day ahead electricity markets. They occur when expected supply exceeds forecast demand and wholesale prices fall below zero. As a result, generators must pay to export their electricity, which forces many renewable operators either to incur losses or to self-curtail. This phenomenon has existed for several years, but its frequency and geographic reach have grown sharply in certain European markets since 2023.
The Nordic region is one region experiencing this trend. Sweden and Finland experienced more than 700 hours of negative pricing in 2024, driven largely by strong wind conditions, rapid deployment of new renewable generation and grid constraints that limited the transmission of surplus power. Similar challenges have appeared in the Benelux region and Spain, where seasonal solar output and inflexible system requirements have contributed to periods of oversupply.
These developments are particularly challenging for renewable generators. Wind and solar assets cannot control their underlying resource, and without co-located storage they cannot shift production into higher price periods. Remaining online during negative hours can quickly erode margins, while self-curtailment reduces total output and affects the delivery of both power and green certificates to offtakers. In markets with growing corporate power purchase agreement (PPA) activity, this creates operational and contractual pressures.
To manage these risks, it is essential first to understand the true break-even point of each asset. Once variable operating costs and all revenue steams are taken into account, this could be higher or lower than €0 per hour of power produced. Once this is known, operators can endeavour to lower that threshold through several strategies. These include forward trading renewable certificates to secure incremental revenues, renegotiating existing power purchase agreements (PPAs), so that production can continue through negative price periods, designing new PPAs with settlement mechanisms that reflect current market realities and reviewing operating contracts where costs directly linked to generation are optimised. These are all measures that we at NTR have used across our portfolio to avoid unnecessary self-curtailment and stabilise long term revenues.
As an asset manager with clean energy transition infrastructure across Europe, we are constantly alive to these issues and the need for active management. For example, a Swedish wind farm in our portfolio faced significant curtailment in 2024 due to the strong wind conditions during the year. In 2025, following an amendment to its PPA, the project has been able to remain online through most negative price periods. As a result, it has generated substantially higher volumes, is performing ahead of budget and is delivering more consistent power and certificates to its corporate offtaker. Comparable outcomes have been achieved at NTR’s UK assets, including a solar project in England and a wind farm in Northern Ireland, where carefully negotiated, flexible corporate PPAs have allowed continued generation through negative periods, creating a win-win for both generator and offtaker. In Spain, we have approached the issue in two ways, by both putting in place a flexible PPA and by putting software into our solar assets that enable better planning between the grid operator and the generating units on a day ahead basis, helping to reduce the amount of hours we are asked to curtail due to grid constraint.
While commercial mitigation is essential, long-term progress will depend on strengthening Europe’s energy infrastructure. Investment in electrification enabling infrastructure will be critical. Investing in grid will help relieve transmission bottlenecks as renewable capacity grows. Grid supporting technologies can help maintain system stability as conventional plants retire. Energy storage, both short duration and long duration, will play an increasingly important role in absorbing surplus supply and smoothing price volatility. Electrification of heat and industry will also help align demand more closely with renewable generation.
These solutions are already attracting investment. We are seeing opportunities across clean power generation, grid enhancing technologies and other infrastructure that supports electrification. Investment in these initiatives will help improve system flexibility, reduce the likelihood of sustained negative pricing and support the continued growth of clean power across Europe.