Monthly captured values of solar in selected EU countries

How is the captured value calculated?

To calculate the captured value of solar energy, the hourly prices of the day-ahead market and the solar generation profile from the European Network of Transmission System Operators for Electricity (ENTSO-E) are used. Each hour's hourly solar value is calculated by multiplying the solar generation by the hourly price. The sum of the hourly solar value is then divided by the total solar production, yielding the captured market price of solar. This value represents the average day-ahead price, weighted by the solar generation profile.

To determine the cannibalization factor, the captured market price of solar is divided by the average day-ahead price.

Spain

Spain has been experiencing a rapid increase of PV installed in the last few years and it is expected that the PV expansion will continue. According to the latest report of SolarPower Europe, almost 11 GW has been installed, leading to a 117% increase in 2020-2022. From the 26.4 GW installed at the end of 2022, the medium scenario of SolarPower Europe expects an installed capacity of 77.7 GW by the end of 2026. As a point of comparison, the total electricity consumption was 250.4 TWh in 2022 or an average load of 28.5 GW.

Together with Portugal, the Iberian peninsula is relatively less well interconnected than other European countries. Therefore, internal solar generation cannot easily be exported, and local prices are depreciating during sunny hours.

The graph below is showing the monthly cannibalization factor since 2020. We can clearly observe a decrease in captured prices with time, with values lower than 0.85 for March 2023 (incomplete data), April 2022 and September 2022.

If we look at the daily solar cannibalization factor, we have a correlation between the cannibalization factor and the residual demand, expressed by the daily load minus the wind and solar generation. The following graph is showing the result for the first three months of 2023.

Greece

This is the same analysis for Greece. The country has a total installed capacity of 5.6 GW at the end of 2022 and the medium scenario of SolarPower Europe expects a capacity of 15.9 GW by the end of 2026. The solar capacity has recently increased again after some years of stagnation as presented in the graph below. In order to appreciate the installed capacity, the electricity consumption in 2021 was 56.9 TWh, or the equivalent of an average load of 6.5 GW.

From the monthly solar cannibalization factor presented below, we can observe a clear decrease since July 2022. Two months have been particularly impacted, October 2022 and March 2023.

Compared to Spain, Greece is better interconnected to neighboring countries relative to its size. Nevertheless, the share of wind and solar is starting to put pressure on the prices as well as the grid operations.