Spain and Portugal recorded a rise in negative electricity prices in the first quarter, driven by strong solar energy generation and relatively low demand on the Iberian Peninsula. Further records are likely in 2026 as solar capacity grows, with more frequent price volatility expected across Europe.
Negative electricity prices reached a new record in the first quarter on the Iberian Peninsula, driven by record renewable energy generation.
According to the latest quarterly report on the European electricity market from analytics firm Montel, Spain recorded 397 hours of negative prices between January and March – significantly higher than the 48 hours recorded in the same period of 2015 and close to the annual total of 555 hours that year. Portugal reached sub-zero prices for 222 hours in the same period.
A surge in solar energy generation was the main driver of this trend, especially during peak production hours. For example, on February 21, prices fell to -€58.60/MWh between 12:00 and 12:45 CET, when solar production reached 15.6 GW against demand of 24.6 GW.
This contrasts with the rest of Europe, where no country has endured more than 53 hours of negative prices this quarter. The difference is largely attributed to milder temperatures in the Iberian Peninsula, which limited demand growth compared to other regions, especially Northern Europe.
Jean-Paul Harreman, managing director of Montel EnAppSys, said future trends will remain highly dependent on weather, although continued growth in solar capacity points to further records. Despite shorter daylight hours in winter, solar production was already high in the first quarter, reflecting rapid capacity expansions. Production levels are expected to exceed last year’s peaks during the summer months.
New records for negative prices in 2026 are therefore likely. Longer daylight hours in the second quarter, combined with additional solar capacity, could strengthen the trend.
Across Europe, total renewable generation reached 384.9 TWh in the first quarter, driven by record solar production of 52.6 TWh, up 15% year-on-year, alongside a recovery in wind power generation and strong hydropower production.
For the second quarter, the report forecasts prolonged periods of renewable energy surpluses, potentially leading to more frequent negative price events, as well as curtailments and adjustments in nuclear production during peak solar production and periods of strong wind production at night or on weekends.
At the same time, higher prices are expected in the afternoon hours, when declining renewable production increases dependence on combined cycle gas turbines, which remain exposed to gas price volatility.
Harreman also warned that while demand is likely to decline as temperatures rise, extreme heat could still put pressure on the system, especially given relatively low gas storage levels.
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