Solar power in the Netherlands pushed electricity prices deep into negative territory, forcing day-ahead auction to be repeated

The European day-ahead electricity market faced an unusual situation yesterday, when an auction had to be repeated because of extremely low prices on the Dutch market. The cause was very high expected output from solar power plants, which the country was unable to export, pushing prices for midday today deep into negative territory. According to analysts, this situation serves as a warning for the coming months, when solar power generation will continue to grow.

Expectations of a large electricity surplus around midday today had a major impact on trading on the day-ahead market yesterday, with prices on the Dutch market falling into negative territory for six consecutive hours. The publication of the auction results was delayed by 90 minutes, according to Montel, because the auction had to be repeated after prices in some hours fell below the limit set at -150 EUR/MWh.

During the midday peak, specifically for the two hours between 13:00 and 15:00, prices fell as low as -200 EUR/MWh, also pushing the average for peak load—the period between 8 a.m. and 8 p.m.—into negative territory. In recent years, the Netherlands has seen rapid growth in installed solar capacity, but the development of the necessary storage and other sources of flexibility in the system, which could reduce the risk of extremely negative prices, has lagged behind.