Energy prices in France are turning negative due to excess solar and wind production

• According to Bloomberg, energy prices in France have fallen to negative levels amid a glut of renewable energy.
• At one auction, day-ahead prices reached a four-year low of EUR 5.76 per megawatt hour.
• This caused some French nuclear power plants to stop operating before the weekend.

Day-ahead power prices in France fell to negative territory as renewable energy production surged, Bloomberg reported.

Prices, which are set before the start of operations, fell to a four-year low of €5.76 per megawatt hour at the Epex Spot auction.

While rising wind and solar power generation is to blame, demand is also expected to decline in the run-up to the weekend. The imbalance forced state-owned utility Electricite de France to shut down a number of nuclear reactors. Three plants have already been stopped and three more were planned to be taken offline.

According to Bloomberg, this is not uncommon and often happens on weekends in France. It is also a pan-European phenomenon, with reactor shutdowns in Spain and the Nordic region.

Across the continent, the push to decarbonize energy grids has accelerated the development of renewable infrastructure. However, without battery technology and investment in storing excess energy, this creates price inefficiencies.

Negative prices also affected Germany, where solar supplies exceeded demand, SEB Research reported in May.

Reuters reported that the situation in France is different because the implementation of renewable energy is slower than in other countries in the region. Paris has installed around 45 gigawatts of wind and solar power and is falling short of European Commission targets.

A bigger slowdown may be on the horizon amid recent political difficulties, with the French far-right confident of winning national elections.

If the National Union wins, it has committed to limiting subsidies for renewable energy sources and ending the expansion of wind energy.