In April 2024, the Iberian power market experienced its first-ever negative day-ahead price, signalling a shift in market dynamics driven by surging renewable generation, price cannibalisation, and evolving bidding strategies. By the end of the year, Spain had recorded 247 negative price hours, while Portugal experienced 196 instances—a trend that is expected to persist in the near term.
Negative prices are no longer isolated events. As solar and wind penetration increases, curtailment grows, and interconnection dynamics shift, market participants face new challenges in forecasting price volatility, structuring PPAs, and ensuring asset profitability. The Iberian market is now witnessing record-low capture prices, with wind and solar generators increasingly bidding at negative levels to secure market access. Simultaneously, grid congestion and inflexible baseload generation exacerbate downward price pressures, making accurate forecasting essential for risk mitigation.
Without a clear understanding of why these price signals are emerging and where they are most likely to occur, investors and asset operators risk financial exposure and missed opportunities. As negative prices reshape Iberia’s energy market, key stakeholders—including developers, traders, and regulators—must adapt their strategies to navigate this evolving landscape.
Key insights include:
- The two primary causes of negative prices: Internal Iberian market bidding strategies vs. external price pressures from neighbouring countries.
- Sector-wide impact: How negative prices affect renewables, storage, and conventional power assets differently.
- Future outlook: Projections on negative price frequency through 2025–2030, based on different market and policy scenarios.
- Mitigation strategies: How ancillary services, hybridization with storage, and PPA structuring can reduce risk.
📩 Contact Mar Escobedo to explore how we can help you navigate Iberia’s evolving power market.
