The Battery as a Trading Desk

The wall of zeros

In 2025 the Spanish power market did something it had barely done before: it started giving electricity away, and then charging you to produce it. The day-ahead price fell below zero for 527 hours over the year. Fold in the hours that settled at exactly zero and you reach 743 — about 8.5% of the calendar. Most of them fell in the middle of the day, when the sun is highest and every solar plant in Iberia is selling the same megawatt at the same moment.

For a decade the story of Iberian solar was one of triumph. Spain and Portugal reached grid parity around 2017-2018, among the first corners of Europe able to finance new renewables without a government subsidy. Auctions and merchant projects followed. Spain now has roughly four times the installed solar capacity it had in 2019, and the pipeline points to a doubling again by 2030. The panels did their job. The problem is that they all do it at once.

That is the uncomfortable question RENMAD put to three specialists in a webinar this autumn, staged in the run-up to RENMAD Invest: are zero prices a passing squall, or the new climate? The answer, roughly, was: the climate — at least until the end of the decade. But buried inside it was a more interesting one, about how you make money when the commodity you sell is sometimes worth less than nothing.

The demand that never came

Gonzalo Cantabrana, who rates infrastructure and project finance at S&P Global, opened with the supply-and-demand arithmetic that a credit analyst cannot avoid, because it is what repays the debt.

Supply has raced ahead. Demand has not. Spanish electricity consumption peaked in 2018 and has drifted down since; even a normalised 2024 came in well below 2019, against a national plan that had penned in demand growth of 3.2% a year. Instead it fell about 1.3%. The usual hopes for a rebound — electrified industry and homes, electric cars, a hydrogen economy, data centres — keep slipping to the right. Data centres in Spain drew around 1 GW in 2024, roughly 2.5% of demand; even doubling that by 2030 does not rewrite the picture.

"Beyond 2030, around 2030, a lot of things should change at the economic level," Cantabrana said, listing the hydrogen economy and data centres as the candidates. "But what this anticipates is pressure on prices, particularly up to around 2028." His firm's break-even work, from April, put a theoretical figure of €41/MWh on a ten-year PPA for a new plant. The trouble is that solar capture prices are modelled well below that — the numbers of €10 to €20/MWh that spooked the audience. As he put it, once you are down there, "10 against 20 makes an important difference" for a new plant, and older plants built at higher capital costs feel it more.

Summer stops being safe

Rodrigo García, operations director at Optimize Energy, took the annual averages and drilled into the hours, where the damage actually lives.

The negative-price count tells the story of acceleration: from roughly 200-240 hours in 2024 to 527 in 2025, and deeper — Spain began seeing prices of minus €15. Traders that used to bid at small negative numbers have moved to sharply negative ones, because they have PPAs or delivery obligations that force them to sell. Curtailment adds to the wound: photovoltaic non-remunerated curtailment jumped toward 800 GWh a year, and while the national figure sits around 3-7%, individual grid nodes are already running at 40-46%.

Most striking was the seasonal creep. The third quarter used to be safe ground for solar capture; not any more. "Before, it was assumed that Q3 was already a bad quarter," García said. "But what we've seen this year is that this problem has extended to the summer months too." His numbers were blunt: August captured 47% of the average price this year, against 72% the year before. And with 6-7 GW of solar still landing every year onto flat demand, he added, "this should get worse."

His fix is the one everyone reaches for — batteries — but with a twist. Only a handful are operating in Spain: Iberdrola's Abadiño stand-alone unit, a scatter of hybridisations. Yet the few that exist are already doing things. Abadiño is cleared to bid into secondary reserve, and ancillary services, García argued, are where batteries will earn their keep. The catch is that the people financing them must learn a new trade. "Before, they knew they had the day-ahead market, and it was practically a P-times-Q and nothing more was needed," he said. "Now the revenue stream is going to be much broader."

Where the magic is

That broader revenue stream was the subject Jesús Mora, senior business developer at Enspired, came to explain — and his framing is the one worth keeping.

A solar plant sells a forecast into the day-ahead market and then corrects it, buying and selling in the intraday sessions as the forecast changes. Sometimes those corrections cost money; sometimes they make it. Add a battery and the whole asset changes character. "By having a battery in our asset, we immediately convert it from a fixed-production asset into a flexible one," Mora said. "And this flexibility can be monetised if it is done properly."

The point is not simply soaking up cheap energy and selling it later, though a battery does that too. It is trading the spreads. A battery on secondary regulation reserves a band of capacity, collects a fixed payment in euros per megawatt just for being available, and then plays the room left over. In one day's example Mora showed, a 10 MW two-hour battery moved almost four times more energy in the market than it physically delivered — some 2,359 transactions — for 30-50% more revenue than energy movement alone would yield. "What matters is not whether the price is minus 100 or 100," he said. "What matters is that there are price differentials" — that minus 100 can go to minus 50, that 80 can go to 100. "This is where the magic happens, or what I called before the monetisation of flexibility. And before having a hybridised project, a renewable plant, it is impossible to do."

Do it well and you also protect the asset. Careful cycling keeps battery degradation low, stretching a project modelled at 15-16 years past 20. None of it happens by hand. It needs algorithmic trading — a machine weighing prices, cycles and depth-of-discharge at once — which is precisely the skill in short supply, and precisely why, with so few batteries live, the optimiser is the differentiator rather than the hardware.

The dictator premium

If the case for flexibility rests on volatility, 2026 has been generous. A war-driven gas spike out of Iran has jolted prices again — an unwelcome thing for households, but the raw material a storage trader feeds on. Mora made the point himself, gesturing at how fragile the consultants' tidy equilibria are: "In five years, some crazy dictator over there starts a war and hits gas prices, and prices shoot off, or a supply chain breaks. Every so often there's a disruption that changes everything."

That is the investor's real dilemma, and the panel did not dress it up. Merchant projects — those without contracts — face volatility that "leads creditors and financiers to give less financing, or more expensive financing," Cantabrana said. PPAs that once ran ten years now cluster at two to five. Zero-price hours make solar harder to bank. The audience's recurring question — will capture prices really sit at €10? — got no comfortable denial, only the reminder that a projection is not a prediction, built on thirty or forty assumptions, any one of which can move the line.

There is a cannibalisation worry too, the British experience of an ancillary market swamped by batteries. The panel's answer was that Spain has 15 MW installed and is fretting about a problem that needs gigawatts; and that a well-designed battery moves between markets as they saturate, leaning on ancillary services now and on intraday energy arbitrage later. "If they lose something in balancing services, they'll surely gain it in arbitrage," García said. The asset adapts. What does not change is the direction of travel: the plants that thrive will be the ones that can trade.

Kicker

The old renewables pitch sold certainty — sun in, subsidy out, a tariff to underwrite the loan. The market that has replaced it sells the opposite. It rewards the operator who can turn a fixed lump of solar into something that reads the spreads and moves. Curtailment and the "sunshine tax" tell the same market's story from the grid's side; this is the finance side, and its lesson is narrower and sharper. In a world of zero-price afternoons, the panel is no longer the interesting part of the plant. The trading desk is.

The full session, with all three presentations and the audience Q&A, is available on demand from ATA Insights. RENMAD Invest — the one-day event these questions are built for — runs in Madrid on 27 January.