European spot electricity prices collapsed over the weekend

Last weekend, much of Europe experienced sunny and windy weather, which was reflected in spot electricity prices, which fell well below zero in some hours. In Germany, prices around midday on Sunday even plunged to nearly -500 EUR/MWh, a level the market had not seen for 14 years. Prices also turned negative in Germany on Monday, although stronger demand during the working week prevented such a sharp drop as on Sunday.

European electricity markets have repeatedly seen spot prices fall close to zero around midday on weekends in recent weeks. This is due to a sharp increase in installed solar capacity and lower demand compared with previous years. Last weekend, however, strong output from photovoltaic power plants was joined by wind power.

Spot prices for electricity delivery last Sunday turned negative in Germany for 14 consecutive hours. Output from photovoltaic and wind power plants was so strong that even the rules under which some renewables receiving support through recent German auctions lose their entitlement to operating support during several-hour periods of negative prices did not prevent prices from plunging deep into negative territory. These rules also failed to prevent prices from falling below zero on Monday, when they remained negative in Germany for six consecutive hours.