Renewable energy investments face price cannibalization risks

Analysts from Aurora Energy Research warn that rapid penetration of renewable energy, particularly solar photovoltaics, is leading to price cannibalization. This phenomenon occurs when high production during midday hours drives wholesale electricity prices down to zero or even negative levels, potentially reducing revenues by 40% to 50% compared to average wholesale prices.

The impact is most pronounced in Greece and Romania, where solar capacity is growing rapidly without a corresponding increase in storage capabilities. In contrast, Bulgaria is better positioned to mitigate these market fluctuations due to its significant energy storage portfolio, which stands at approximately 6 GW.

In Greece, solar capacity has already exceeded the 2030 NEC target, reaching 13.5 GW. This shift is moving market interest toward battery storage and hybrid projects. Experts suggest that the future viability of renewable investments will depend heavily on the deployment of energy storage systems and the ability of players to withstand increasing market concentration.