French Power Price Plunges Below Zero as Solar Floods the Grid
(Bloomberg) -- French day-ahead power tumbled below zero for the first time since July last year as solar generation this weekend is set to overwhelm the grid.
The daily average settled at €-1.05 a megawatt-hour in an auction on the Epex Spot SE exchange in Paris. It’s the lowest level among all the major markets in Europe.
Negative hourly prices are becoming a more frequent phenomenon across the continent as renewable power floods the network, but it’s still unusual to see the overall rate below zero. While that’s welcome news for many consumers, it’s decimating returns for developers and investors in Europe’s renewables industry.
Output from France’s solar parks is set to peak at almost 14 gigawatts on Saturday, according to a Bloomberg Model. That compares with a record of about 18 gigawatts at the end of March. A drop in solar panel costs means that France and other nations are adding new capacity at a record pace, and country is set to install an additional 5 gigawatts this year, according to BloombergNEF.
The surge in renewable energy is also impacting traditional power producers, including Electricite de France SA. Average output from its fleet of reactors is so far this month at its lowest level since 2022.
There’s consensus among traders and analysts that negative prices are here to stay for some years since the region doesn’t yet have sufficient battery storage to even out peaks and troughs in supply.
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