Greece’s elevated wholesale electricity prices can’t be explained by the global energy squeeze alone. The way the domestic power market operates—and how much of the country’s increasingly abundant renewable generation actually reaches the grid—is emerging as another important factor shaping prices.
Higher natural-gas and oil prices, alongside geopolitical tensions around the Strait of Hormuz, have renewed pressure on European energy markets. But in Greece, developments inside the electricity market are drawing scrutiny as regulators examine an unusual pattern in solar generation during some of the sunniest hours of the day.
The issue highlights a growing challenge for Greece as it rapidly expands renewable-power capacity. Solar and wind farms can produce electricity at very low marginal cost, helping push wholesale prices sharply lower when output is plentiful. Yet having that inexpensive electricity available doesn’t necessarily mean every megawatt-hour that could be produced makes it onto the grid.
ΔΙΑΒΑΣΤΕ ΕΠΙΣΗΣ
That distinction is becoming increasingly important as renewable energy takes a larger role in Europe’s power system.
Renewable sources accounted for 54.1% of electricity generated in the European Union in the second quarter of 2026, compared with 54.3% in the same period a year earlier. Solar was the largest renewable source, representing 41.6% of renewable electricity production, up from 37% in the second quarter of 2025.
Wind accounted for 27.7%, followed by hydropower at 22.6%. Renewable fuels represented 7.7%, while geothermal and other renewable sources accounted for the remaining 0.4%.
The EU-wide figures mask wide differences among member states. Latvia recorded the highest renewable share in the second quarter, at 97.7% of electricity production, driven largely by hydropower and solar. Denmark followed at 94.3%, with wind playing the leading role, while Croatia reached 92.2%, largely because of hydroelectric generation.
At the other end of the spectrum, renewables represented 19.8% of electricity generation in Slovakia, 20.9% in the Czech Republic and 24.5% in Malta.
Greece is relatively close to the EU average, but the rapid expansion of its solar fleet is creating a new set of challenges for the country’s power market.
During periods of intense sunshine and relatively weak electricity demand, large volumes of solar generation can push wholesale prices sharply lower, sometimes to zero or even below it. Negative prices are becoming an increasingly important feature of European electricity markets as renewable capacity expands faster than grids, storage and demand flexibility in some regions.
It is against that backdrop that Greek regulators are examining an unusual development.
During August, photovoltaic generation fell during certain midday periods when, given the intensity of sunshine, production might normally have been expected to be near its peak. Greece’s
Regulatory Authority for Waste, Energy and Water, known by its Greek acronym RAAEY, is examining the issue, according to people familiar with the market.
One question under examination is whether some producers voluntarily reduced their output beyond curtailments ordered by Greece’s transmission-system operator, IPTO, which can restrict renewable production when necessary to maintain the stability of the electricity system.
The distinction matters because producers can have an economic incentive to reduce generation when wholesale prices turn negative.
In Greece’s day-ahead electricity market, a price below zero can effectively mean that generators have to pay to inject electricity into the system. Depending on the circumstances and the support regime under which a renewable plant operates, sustained negative prices can also affect the compensation producers receive.
August’s market behavior has therefore attracted attention. During hours when strong photovoltaic production might ordinarily have been expected to drive wholesale prices toward zero, zero-price periods were notably less frequent. In some instances, wholesale electricity prices instead approached €100 a megawatt-hour.
That doesn’t by itself establish that generators deliberately withheld production to influence prices. Renewable output can change for a range of technical and market reasons, while grid operators routinely curtail generation when the electricity system can’t safely absorb all the power available.
RAAEY hasn’t reached final conclusions, and no market manipulation has been established.
Still, the episode illustrates how the economics of a power system can become more complicated as renewables take a larger share of generation. Solar power can reduce wholesale electricity costs substantially when production is high, but the effect depends on how much generation reaches the market, the capacity of the grid to accommodate it and the incentives facing producers.
Those domestic dynamics are becoming more significant as external energy risks mount.
Higher natural-gas and oil prices can increase electricity-generation costs, particularly when gas-fired plants are needed to meet demand and set marginal wholesale prices. Geopolitical disruption around the Strait of Hormuz, a crucial route for global energy supplies, can add another layer of pressure by lifting international fuel prices and increasing uncertainty over supplies.
Such forces can feed quickly into European electricity markets. But they don’t necessarily explain every movement in Greece’s wholesale power prices.
For Greece, the question is increasingly not simply how much renewable electricity the country can produce, but how much of that low-cost power ultimately reaches consumers through the electricity market.
The regulator’s examination of August’s solar-production patterns could help clarify whether the unusual declines were the result of ordinary operational constraints, producers responding individually to negative-price incentives or other market dynamics.
