Negative prices and hybrid PPAs are two sides of the same solar surplus
Serguey Asael Shinder1 min readTwo items from Spain on 6 October fit together.
The problem, measured. Montel's quarterly outlook counted 596 hours of negative electricity prices in Spain in the second quarter of 2026, the most in Europe, with Portugal second at 462. Solar output across Europe beat its previous record by nearly 20%. At midday the system had more power than it could use; in the evening, during a late-June heatwave, Spanish prices went back above €100/MWh.
A business model built on it. The same day Zelestra and EDP signed two more hybrid PPAs that add 462 MWh of batteries to Spanish solar plants, three of them already operating. The batteries move midday output into hours when it is worth more, and let the producer sell the buyer a flatter delivery profile instead of a midday spike.
What connects them. Negative prices are a price signal that storage is undersupplied relative to solar. Each negative hour is an hour in which a battery could charge for free or be paid to charge, and each evening spike is an hour in which it can sell. A solar plant on its own captures neither; a solar plant with a battery and a buyer who values a flat profile captures both. That is why existing plants, not only new ones, are getting batteries under contract.
What to watch. Montel also reports that some flexible plants and storage have stopped bidding below zero in day-ahead auctions and are keeping capacity for intraday markets. If more balancing moves to intraday trading, the value of a battery depends less on the day-ahead curve and more on how fast it can respond. The next quarterly counts of negative hours will show whether contracted storage is beginning to flatten the midday trough or is still too small to move it.