Negative prices and pro-rata cuts: Is Germany’s market still profitable?

Webinar overview:

The number of negative electricity price hours in Germany has increased significantly in recent years, reflecting a growing imbalance between electricity supply and demand. This trend is closely linked to the rapid expansion of renewable energy generation, which increasingly leads to periods of structural oversupply, particularly during hours of high wind and solar output.

Regulatory changes have altered how this imbalance is expressed in the market. With the introduction of § 51 of the German Renewable Energy Act (EEG), many renewable generators are no longer incentivised to bid into the market at negative prices. Instead, bids are increasingly placed at zero, which does not eliminate the underlying oversupply problem but rather shifts it from negative-price hours to a rising number of zero-price hours.

In this webinar, we explore the implications of this development for market clearing, traded volumes, and price formation, with a particular focus on the “pro-rata” allocation mechanism applied at the exchange when not all volumes can be sold.

Themes covered in the webinar:

• The rise of negative electricity prices in Germany

• Structural oversupply driven by renewable energy expansion

• The impact of §51 EEG on bidding behaviour and why negative prices may be replaced by zero-price hours

• The pro-rata allocation rule at the exchange and when it applies

• Why pro-rata volumes matter for market participants

What will you learn in the webinar:

Participants will gain a clear understanding of why the increasing number of negative price hours signals a structural oversupply in the German power market and why this imbalance is likely to persist as renewable generation continues to grow. The webinar explains how § 51 EEG changes bidding incentives for renewable generators and why this may lead to a significant increase in zero-price hours rather than resolving the oversupply issue. You will learn how the “pro-rata” allocation mechanism works, under which market conditions it is triggered, and why it is essential to look beyond prices alone and analyse “pro-rata” volumes. Finally, the webinar highlights why zero-price hours and “pro-rata” risks are becoming a critical factor for price interpretation, market liquidity, and revenue assessment in the German power market.

Who should attend this webinar:

• Renewable energy asset owners and operators

• Utilities and power market participants

• Energy traders and portfolio managers

• Market analysts and consultants

• Policy and regulatory stakeholders

• Anyone interested in price formation and market mechanics under high renewable penetration