Curtailment, record-low power prices threaten photovoltaic investments in Spain

Renewable energy promoters have underestimated the effects of restrictions and low wholesale prices, putting countries like Spain at risk of bankruptcy.

In April, the average wholesale price in Spain reached a historic low of just over 5 euros per MWh.
The situation is even worse if regional energy trade is taken into account. In Bulgaria, the clearing price is usually zero or negative during the midday production peak, making Greece a net importer during those hours if its own price is even slightly higher.

Prices equal to or less than zero make producers indifferent to reductions, since they receive nothing anyway. In turn, it will erode interest in investing in Spain and Greece, which until now has been at high levels.

It should be noted that the Greek government presented a new bill that eliminates the so-called 5% rule for reductions. Until now, a renewable electricity plant producing 100 MWh per year was subject to total reductions of up to 5 MWh. The rule will now be removed and grid operators will be able to cut production as they see fit.

Spain also faces problems derived from low prices and restrictions. The average price in April was only 5 euros per MWh. Energy services provider Our New Energy said bankruptcies are a possibility going forward, as market players are already considering divestment.

The problems will have to be resolved for renewable energy penetration to reach the 2030 target, which for Greece is 80%, up from 55% currently.