With the rapid growth of installed wind and solar power capacity, the European electricity market has witnessed frequent negative pricing in recent years. Negative pricing occurs when there is an excess supply of electricity in the market, forcing generators to pay users to consume excess power. This phenomenon has emerged in several European countries, with Germany, France, and Spain being particularly prominent. As Europe’s largest electricity market, Germany experienced negative pricing for 468 hours in 2024, a 60% increase year-on-year. France saw its negative pricing hours double to 356 hours, while Spain witnessed negative pricing for the first time, totaling 247 hours throughout the year.
The main reason for the decline in European electricity prices is the oversupply of renewable energy. With the rapid development of renewable energy sources such as wind and solar power, electricity supply has continued to increase, while demand has not grown at the same pace, leading to a supply glut in the electricity market and subsequently triggering negative pricing.
The frequent occurrence of negative pricing has also sparked political controversy. Some politicians are calling for a reduction in subsidies for renewable energy generation, arguing that it is unreasonable for the government to continue paying minimum subsidies to generators amid excess supply. Such subsidy policies not only increase the financial burden on the government but may also inhibit the healthy development of the electricity market.
