During the first quarter of 2026, Spain recorded 397 hours with negative prices and curtailments of up to 37% at some nodes , while numerous standalone photovoltaic PPAs are already trading at around €27 or €30 per MWh. In this scenario, Iberdrola and Statkraft warn that the Spanish photovoltaic sector will have to seek new avenues for profitability in ancillary services, storage, and hybrid products.
“It is true that in the scenario we have right now, with such low prices, we see that these zero prices are repeated every day, we even reach negative prices on some weekends,” said Alejandro Rey Feter, Operational Trading Supervisor of Iberdrola , during the III Conference on Energy Storage and its Value Chain.
“It’s a situation that doesn’t favor projects, especially those that don’t have a long-term contract or income stability,” he added.
Pressure on bankability is already evident in the pipelines . According to Energía Estratégica , several assets may not reach COD under the economic conditions for which they were designed, while developers and IPPs accelerate refinancings, long-term hedges, and battery hybridizations to reduce merchant exposure.
“In the operations departments, our work also lies in identifying which services the system values most right now, which don't necessarily have to be the delivery of active energy, which is what we were used to until now,” said Rey Feter.
In that scheme, the advantage will be in anticipating: the plants that are enabled earlier to provide adjustment services will be able to capture better margins during the first stages of market development.
Adjustment and storage services: the new solar profitability
The drop in captured prices, the oversupply during peak hours, and the increase in spills change the debate, which already It's not just about installing megawatts, but about capturing value when the system requires it.
Storage appears in that equation as a tool to shift production, reduce exposure to depressed prices, and open up participation in complementary markets.
“I believe that in terms of storage, we don't currently have a solution that is a winner in all aspects. We must distinguish between long-term and short-term storage. Regarding long-term storage, Iberdrola also firmly maintains that pumped storage is the definitive solution,” Rey Feter stated.
“Taking the example they mentioned earlier of La Muela, which is right here, we are talking about a turbine-pump power of about 100 MW and an upper storage capacity of almost 25 GWh, which is still very far from any other BESS solution that we can put on the table,” Rey Feter explained.
The main barrier to pumped storage lies in the initial capital expenditure (CAPEX) and the construction or retrofit times, which tend to be longer than with other technologies. This gap creates an opportunity for batteries, which offer faster deployments, lower initial investment, and immediate response capabilities in a system with high penetration of variable generation.
The market is already starting to move in that direction. Hybrid PPAs can be priced above €40 per MWh , compared to €27 or €30 per MWh for many standalone solar contracts. Long-term tolling agreements for BESS projects are also gaining ground , with structures that provide predictability for financiers and investors.
“The solution must be something complementary. And we mustn't lose sight of pumping, because right now we're all focused on batteries, but really, as a structural solution, pumping is very important,” the Iberdrola executive concluded.
Low PPAs and new contracts: Statkraft pinpoints the financial pressure
“The biggest challenge for photovoltaics right now is to move from volume to value. We will continue installing photovoltaics, but the most important thing is that it is integrated into the system and the market,” said Guillermo Roth, deputy director of Statkraft Spain.
Statkraft's perspective adds a contractual and financial layer to Iberdrola's operational analysis. With low PPAs, prices captured at record lows, and increased pressure on revenue, projects require structures capable of combining technologies, markets, and supply profiles.
“A few years ago, any project with a PPA could be financed because the prices were decent, within the profitability ratios and ambitions of the developers. But now that market doesn't exist. The PPA price being offered is very low because there's no demand on the other side of all this.”
Meanwhile, many lenders are reluctant to back projects without hedges . The market continues to prioritize long-term structures with limited merchant exposure, but current price levels no longer always allow for cost-effectiveness.
“We are missing pieces, so it is not a question of finding a magic number, but of reinventing the energy supply service that is being provided,” Roth stated.
The solution, according to the executive, lies in building more sophisticated products : batteries, onsite or offsite wind power, associated storage in another location, and contracts capable of improving the revenue profile compared to low PPAs and greater merchant exposure.