Negative prices to form so-called bathtub curve in Greece as photovoltaics keep growing

The latest modeling for the wholesale electricity market in Greece shows ever-decreasing prices at times when solar power output is the strongest within the day. The trend points to the formation of a so-called bathtub curve in the daily price charts at the power exchange, as a result of the expected continuation of the photovoltaic capacity surge.

Greece experienced its first negative prices this year. They intensified in August and September, weakening the profitability of investments in the production of renewable electricity.

This year, market participants expect at least 2 GW of photovoltaics to connect to the grid, along with the first standalone battery storage units.

Currently, prices usually fall to a negative EUR 1 per MWh at the most. However, the pace of installations indicates that prices will go even lower. According to the Hellenic Association of Photovoltaic Energy Producers (SPEF), analytical models indicate that for every 1,000 MW of new solar capacity, the so-called system marginal price (SMP) at noon is lowered by EUR 10 per MWh.

Storage acts as a shield against price drops. But even if as many batteries are added as photovoltaics, the wholesale price is seen at a negative EUR 5 per MWh on average during the hours of maximum solar production, the organization’s Chairman Stelios Loumakis said. The level would fluctuate depending on the season and conditions in the system.

With the addition of 500 MW of wind energy per year, the price is at EUR 7.5 per MWh below zero. If system demand also rises, then the level is slightly higher, at EUR 5 per MWh in negative territory.

Loumakis: The duck curve will eventually become the bathtub curve

Especially concerning is that such price formation would turn systematic, almost daily. Loumakis expects more than 1,000 MW of annual solar installations in the following years. Therefore, the actual price could be much lower.

As things stand today, the daily power price curve resembles a duck in markets with high renewable energy penetration. Medium prices in the morning are followed by a drop at noon and a great rise later in the day. A much more pronounced curve is expected in the near future, looking more like a bathtub, he explained.

Loumakis warned years ago about the repercussions from a rapid rise in solar energy, saying that the market would overheat and lower profits.

Up to 3 GW expected this year

Other market players echoed his concerns. CEO of MGD Energy Panagiotis Mourtopalas said at the Renewable and Storage Forum that business plans are under pressure because of curtailments and negative prices. This year, 2,000 jobs have been lost in the renewable energy market as a result.

The Hellenic Association of Photovoltaic Companies (HELAPCO) estimates that new capacities this year would amount to between 2.6 GW and 3 GW, with no sign of slowing down.