Negative prices and curtailment in a Danish PPA

Negative power prices used to be a curiosity. In Denmark they are now a line in every solar and wind budget. In 2025, DK1 had 441 hours in which the day-ahead price was below zero, up from 281 in 2023, and a Danish solar park produced about one MWh in ten in those hours. Who carries that cost is one of the first questions in a Danish PPA, and one of the most common reasons a deal stalls.

How often prices go negative

DK1, west of the Great Belt, sees more negative hours than DK2 because more of Denmark’s wind and solar sits there. 2026 has had fewer so far, in a year with higher prices overall: DK1 averaged about €107/MWh from January to September, against €81/MWh in 2025. A PPA runs for years, so its terms have to work in a year like 2025 as well as a year like 2026.

Which plants are hit

Solar is hit hardest because all solar produces at the same time. The sunny middle of a windy spring weekend is exactly when prices fall below zero: DK1 had 58 negative hours in April 2026 alone. The picture was the same in 2024, when 10.4% of solar output in DK1 and 11.0% in DK2 fell in negative hours. Wind spreads its output over day and night and is hit half as often or less. Offshore wind rarely is.

Four ways a PPA handles negative hours

There is no market standard. Most contracts use one of four approaches.

1. The buyer pays the agreed price in every hour. The plant keeps producing, and the producer receives the fixed price regardless. In a virtual PPA the buyer then pays the fixed price minus a negative market price, which is more than the fixed price itself. The producer carries no negative-price risk, and buyers increasingly resist this.
2. Settlement stops at zero, and the plant may stop. Nothing is settled in negative hours, or the market price used for settlement is floored at zero. The producer carries the risk and usually gets an express right to switch off, with those hours excluded from its availability guarantee.
3. Shared risk with a cap. The producer keeps delivering, and negative prices are replaced by a fixed price, usually zero, up to an agreed volume or number of hours a year. Beyond the cap, the risk moves to the other side.
4. Buyer-directed curtailment with deemed volume. The buyer can ask the plant to stop in negative hours and pays for the volume it would have produced, calculated by a formula agreed at signing. No guarantees of origin are issued for power that is not produced, so the contract also has to say whether the producer supplies replacement certificates.

Which one fits depends on who controls the plant, the volume structure, and whether there is a battery. A baseload or fixed-volume deal usually leaves the risk with the buyer, because the volume has to be delivered. A pay-as-produced deal can go any of the four ways.

Lenders read this clause too

The clause does not only move income between the parties. It decides whether a bank will lend. Some lenders now refuse to finance projects where the producer carries all the negative-price risk with no compensation for negative and zero-priced hours, and they test how sensitive each project is to the market before they size the loan. A producer that agrees to carry the full risk may find that the PPA is signed but the financing is not.

Curtailment for other reasons

Not every stop is about price, and a PPA should treat each cause separately.

• Grid curtailment. Since 1 May 2024, Energinet’s terms let a plant on the transmission grid connect sooner with temporarily limited grid access. In return, Energinet can curtail it until the grid has been reinforced. The PPA has to say whether such stops are excused, and whether any volume counts as delivered.
• Balancing and flexibility. A plant that can stop on request is also offering flexibility. How it curtails affects what it can bid into the balancing markets, so the contract should say whether the producer may sell that flexibility and who keeps the income.
• Strategic curtailment. In a virtual PPA, a buyer will want to stop a seller from switching off simply to avoid settlement when market prices are high. Clear definitions of when the plant may stop prevent the argument.

The 15-minute detail

Since 1 October 2025, the day-ahead price in Denmark and the rest of Europe is set per 15 minutes, and an hourly price is still published as the average of the four. A clause written for “hours with a negative price” now needs to say which price it means. The difference is real: from October 2025 to September 2026, DK1 had 283 hours with at least one negative quarter-hour, but only 230 hours with a negative hourly average.

Batteries change the question

A battery that charges when the price is negative and discharges a few hours later turns part of the problem into income. It also moves output into hours that buyers value more, which is why hybrid plants with storage are often easier to place with a buyer. See how much of a buyer’s hours solar, wind and hybrid cover.

Questions to settle before you sign

• Which price defines a negative period: each 15 minutes, or the hourly average?
• In a negative period, does settlement continue, stop, or use a floor at zero?
• Is there a cap on hours or volume per year, and who carries the rest?
• Who may decide to curtail, and is curtailed volume deemed delivered?
• How are grid curtailment, limited grid access and force majeure treated?
• What happens to guarantees of origin for volume that is not produced?
• May the producer sell its flexibility in the balancing markets?

The Nordic PPA term sheet sets out the usual options for negative hours alongside the other nine terms every deal has to settle.

Where Symbolon fits

Symbolon is a PPA broker for solar, wind and hybrid projects of 5–50 MW, based in Denmark. The indicative term sheet in our PPA check states who carries negative prices and balancing, so the question is answered before the first buyer meeting, not in month nine of a negotiation. The check takes two weeks, costs €3,000 excl. VAT, and is deducted from the fee if we close a PPA for the project. Book a PPA check, or read how to find an offtaker in Denmark.