Europe generated a record 129 TWh of solar electricity in the second quarter of 2026, driving more frequent negative power prices and reshaping electricity market dynamics. Montel says flexible generation and storage assets are increasingly shifting from day-ahead trading to short-term markets as the continent’s solar capacity continues to expand.
During the second quarter of 2026, Europe reached a new record for photovoltaic generation, producing 129 TWh of electricity, which is almost 20% more than in any previous second quarter. According to Montel’s Q2 European Electricity Market Summary report, the surge in solar generation is reshaping the role of flexible assets and exposing a widening gap between renewable generation and the power system’s ability to absorb it.
Driven by prolonged sunshine and persistent high-pressure systems, the increase in solar generation prompted many operators of flexible thermal power plants and battery energy storage systems to reduce their participation in day-ahead markets. Instead of bidding energy into these auctions, many reserved capacity for intraday, balancing and ancillary services markets, where they expect higher returns.
Montel says this trading strategy shifts more of the system balancing burden to short-term markets, increases intraday price volatility and raises the value of assets capable of responding quickly to grid requirements.
