BERLIN (Realist English). Negative prices occur during periods when electricity supply exceeds demand: producers effectively pay for the grid to accept their electricity.
As wind and solar generation rapidly expands across Europe without a synchronous expansion of storage, grids, and flexible consumption capabilities, this phenomenon has become increasingly common in recent years.
Germany Bucks the Trend
In 2025, Germany recorded about 573–576 hours of negative prices — a historic record. However, in 2026 the trend reversed. Montel analysts indicate that in the first half of the year, the number of hours with negative prices fell from 389 to 299 hours — a 23% drop. Epex Spot data also show about 298 hours — almost 100 hours fewer than a year earlier.
Bloomberg explains this decline by two factors: strengthening electricity demand and a change in renewable energy support policy.
Subsidy Reform Changes Producer Behavior
The key institutional change is Germany’s Solar Peak Act (Solarspitzengesetz), which came into force in February 2025. As Montel analyst Jean-Paul Harreman explains, newly commissioned renewable energy facilities immediately lose subsidies as soon as the wholesale price becomes negative; at exactly zero price, they still receive the full subsidy.
Combined with the day-ahead market’s transition to 15-minute trading in October 2025, this rule has created a strong economic incentive for renewable energy operators: to immediately stop generation as soon as the price drops below zero. Harreman notes: “Today’s system creates an incentive to stop production when the price is below zero. This helps prevent prices from falling as deeply into negative territory as in previous years.”
Data confirm this shift. In the first half of 2026, commercial curtailment (i.e., voluntary cessation of production at zero or negative prices) reached 1,463 GWh compared with 1,216 GWh in the same period of 2025 — an increase of 20%. In other words, German renewable energy facilities were not stopped more frequently, but with each transition of the price into negative territory, a larger volume of generation was withdrawn from the market.
Price Amplitude, by Contrast, Has Widened
The reduction in hours with negative prices does not mean the market has stabilized. On the contrary, the amplitude of price fluctuations has widened significantly. Rabot Energy data show that in the first half of 2026, the minimum price reached minus €499.99 per MWh — just one euro cent from the exchange’s technical lower limit of minus €500. In 2025, the minimum was about minus €250; in 2024, about minus €135.
S&P Global Energy data indicate that the wholesale price spread available to battery storage in Germany in the second quarter of 2026 averaged close to €200 per MWh per day, with intraday peaks exceeding €650 — higher than in Spain and the UK.
Storage Growth Accelerates
Widening price fluctuations stimulate investment in storage. According to DIW Berlin, by the end of the first half of 2026, the total capacity of grid-connected storage in Germany was about 28 GW — roughly 47% of average electricity demand. Half of this is home storage paired with rooftop solar generation. The growth of large battery systems in the first half of 2026 accelerated significantly, while the expansion of home storage slowed — due to a sharp drop in battery prices and a significant increase in market price volatility.
Fraunhofer ISE notes that in the first half of 2026, solar power generation in Germany reached a record 43.2 TWh, up 10% year-on-year; solar accounted for 18.2% of total electricity generation in Germany.
Divergence from the European Trend
Germany contrasts with the general direction in Europe. S&P Global data show that in the first half of 2026, the number of hours with negative prices in five EU countries was about 2% higher than the record level of 2025.
France recorded the highest number of hours with negative prices in Europe — 370 hours in the first half of 2026; Spain — 596 hours; Portugal — 462 hours. Italy, where the share of gas generation is high, recorded no hours with negative prices.
Bloomberg notes that high gas prices in Germany in summer supported electricity prices, while multi-year highs in nuclear output in France reduced regional prices.
Outlook
The reduction in hours with negative prices in Germany is a clear example of how market design adjustments directly change producer behavior. Subsidy reform and the 15-minute trading mechanism together created a kind of “price barrier”: when the price drops below zero, renewable generation voluntarily leaves the market rather than continuing to exacerbate the surplus.
However, this mechanism also generates a new efficiency problem: the 20% increase in commercial curtailment in the first half of 2026 means that more and more clean electricity is being lost. Storage is expanding rapidly, but S&P Global notes that only about 9% of installed capacity in Germany is directly exposed to market risk, while in Europe as a whole about 10–15% of solar capacity is exposed to commercial risk.
The shift of negative prices from “frequent occurrence” to a pattern of “deeper but shorter” essentially reflects the continuing insufficiency of system flexibility — storage and demand management have not yet kept pace with the expansion of renewable generation.
