A new 3E whitepaper by Mester, M., and Neumann, N. addresses the crisis emerging as negative electricity prices threaten profitability. A fundamental risk to financial performance, negative electricity prices are not a rare anomaly. This challenge requires new strategies, skills, and approaches for renewable asset management. Asset operators need to focus on smart management rather than generation. Traditional tools will not work. Negative electricity prices affect diverse markets such as Belgium, Scandinavia, Australia, and California.
In May 2024, on an average Belgium day, prices went down as low as almost - 500 €/MWh. 2021 and 2022 saw relatively modest negative price events. 2023 marked a significant jump to 225 negative price events, and in 2024, the cumulative number nearly doubled. In 2024 and 2025, the data shows not only Belgium, but all of Europe and Great Britain, with accelerating negative pricing hours.
The market, when negative pricing occurs, has moved from maximal output optimization toward maximal value optimization. Maximum production does not equal maximum revenue.
Market volatility periods of negative electricity prices are significant for renewable energy producers. Since government subsidies are commonly calculated based on the volume of electricity produced, electricity providers face substantial financial losses. The 3E whitepaper by Mester, M., and Neumann, N. gives an example:
“For instance, consider a 100 MW solar plant operating with an average of 5 peak production hours per day. With a PPA (Power Purchase Agreement) price of €50.25/MWh, based on 2025 averages reported by Publicover, a constant 10% curtailment could result in monthly losses of up to €75,375.”
Reporting negative pricing losses uses a complicated set of manual calculations to determine what the asset would have produced under normal conditions. The drawbacks to this manual process include: the likelihood of errors, labor-intensive and time-consuming tasks, and delays in financial reporting and compensation claims. Markets in the Netherlands and Germany vary dynamic subsidy schemes based on plant age and real-time electricity prices. Forecasting revenue and planning cash flow is more complex in these two regions. The reduction of field interventions during low-revenue periods (such as minimizing routine cleaning or maintenance events) is used by asset owners to control costs during negative pricing months when subsidies are reduced.
The next section of the 3E whitepaper details two real-world use cases, one from Belgium and one from Germany.
In the first case study, a Belgian asset manager overseeing a 400MW solar portfolio faced frequent negative electricity prices and government-imposed curtailments, leading to significant financial losses. The challenge was to manually calculate energy losses due to curtailment, which took one hour per plant and added eight working days per month. The solution was to implement an APM platform with a physics-based simulation model to automate the estimation of curtailment losses (image below). The platform used real-time data to simulate ideal production and compare it to actual output, improving accuracy and efficiency. As a result, curtailment loss data was integrated into financial and reporting systems, streamlining the process and reducing manual labor.
The second case study involves a German asset manager managing a large solar portfolio, facing changes in compensation rules due to negative prices. The challenge was the lack of centralized data, leading to inaccurate budget and cash flow decisions. The solution was integrating real-time market data into the APM platform, providing a unified view of production, curtailment, and negative prices (image below). This enabled more accurate budgeting and better operational decisions, reducing unnecessary expenses during periods of low or negative pricing, such as May 2025, when 60% of production was impacted.
Negative prices and grid curtailment impact the payment of subsidies to asset owners. An integrated overview of negative price losses and budget financial impacts is required for success.
Key recommendations for asset owners are as follows:
Performance reporting automation: Change from manual filtering and curtailment period analysis to an Asset Performance Management (APM) providing a simulation model.
Early budget planning: Integrate financial data into an APM, monitor current cash flow, and plan interventions.
Scenario and forecasting improvements: Anticipate negative price periods; enhance planning.
Operational team upskilling: Equip operators with training and market data support tools.
Business units collaboration: Align asset strategies across commercial, operational, and risk management teams.
Asset owners mitigate negative pricing financial risks and unlock new revenue optimization by utilizing these strategies.
Find the 3E whitepaper by Mester, M. and Neumann, N. at: “From risk to revenue: thriving in the era of negative prices”.