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00:00This is a story about growing pains.
00:02Solar is now the largest source of power in Europe during summer months.
00:07But unlike fossil fuel plants, renewable energy is at the whim of Mother Nature,
00:12leaving it in short supply on overcast days.
00:15On peak summer days, however, when the sun hangs high,
00:19Europe has more solar power than its system can handle.
00:22And too often, it goes to waste.
00:28Here in the suburbs of Braunschweig, Germany,
00:31solar panels perch on top of red-tiled roofs.
00:35Like many neighborhoods in northern Germany, sunshine is seasonal here.
00:40But for homeowners like Moritz Hain, rooftop solar systems are paying for themselves.
00:45Ja, also der Strom ist nicht günstig in Deutschland.
00:49Und ja, es ist ein bisschen diese Denkweise,
00:52dass man immer versucht hat, vorher Strom zu sparen.
00:54Und jetzt ist man diese Sorge los.
00:56Es rechnet sich, um so besser eine Solaranlage zu haben.
01:00Hain paid over 17,000 euros for his solar system,
01:04after a hefty tax break from the government,
01:07making it possible for people like Jens Sanders of Plankton PV
01:11to build businesses doing the electrical work needed for installation.
01:15So this is a solar panel, the same type that we installed here on this roof.
01:19Hain makes seven and a half cents for every kilowatt hour of electricity he sells to the grid,
01:25though the best option is for him to consume all the solar power at home,
01:29replacing the otherwise costly electricity bill.
01:32Altogether, he expects to earn back his 17,000 euros in five years.
01:37Ja, wir erzeugen über das ganze Jahr gerechnet ungefähr 13,000 kilowattstunden
01:42und wir verbrauchen in unserem Haushalt 3,000 kilowattstunden.
01:47Das heißt, das ist das vier bis fünffache von dem, was wir verbrauchen, erzeugen wir.
01:52Allerdings, also im Sommer ist es sehr viel mehr als wir verbrauchen.
01:55Im Winter haben wir zumindest so, dass wir 40 Prozent selbst abdecken können.
02:00Also das war jetzt das, was wir im Januar gesehen haben.
02:03Government assistance and attractive returns for renewable producers
02:07have driven a massive solar boom across Europe in the last decade,
02:11from rooftops to solar parks.
02:14Solar has been a huge success, right, in Europe.
02:17We are now having more than 400 gigawatt of solar capacity being installed over the last years.
02:22Mario Skiru is the CEO of Incavis,
02:26a renewables company with solar and wind projects across Europe.
02:30Give us a sense of the growth curve in solar in Europe.
02:33I mean, growth has been exponential, right?
02:35It's mainly driven by the fact that the technology costs went down substantially.
02:43I remember when I started working in the renewable industry,
02:46we had a price of about 4 or 5 million per megawatt installed capacity.
02:50Now we are below one-tenth all of it, right?
02:54So it has been crazy development in terms of technology costs.
02:59The dramatic increase in European solar power
03:01has come with its own form of growing pains.
03:04In 2025 alone, Europe added over 80 gigawatts of additional capacity.
03:10That's like installing six panels every second,
03:13producing more energy than the system can absorb.
03:16But today, that crazy development has stalled.
03:19The risk then becomes that those investors almost suffer from their own success.
03:24You get into a position of boom and bust,
03:27where in the good years, you've got a lot of new capacity being delivered,
03:30and markets just simply aren't capable of absorbing that power supply.
03:35Peter Oswaldstone is the research director for European power markets
03:39at the energy and renewables analytics firm Wood Mackenzie.
03:43But as a result, if you think about just a standalone solar project,
03:47as the sun comes up during the spring and summer period,
03:50through that morning, midday peak, you start producing more and more power.
03:55Your peak power production is in the midday hours of the day.
03:58But the solar project next door to you is doing exactly the same,
04:01and the project next to that.
04:03So this is where you get very quickly to a position
04:05where you exhaust the available space in a market,
04:08you've got no more demand to serve,
04:10and prices start to fall very rapidly.
04:12So price cannibalization for generators,
04:14and in a wholesale market context, low or indeed negative prices.
04:19It's a problem of supply and demand.
04:23When solar is generating more power than what the grid can absorb,
04:26prices actually dip below zero,
04:29meaning the power company pays the customer to use more electricity.
04:33Last year, Europe saw a record number of hours when power prices went negative.
04:39When the price turned negative, it usually is driven by other effects.
04:44So in this case, yes, you might argue what was the effect of subsidy schemes,
04:49especially in Germany, let's face it,
04:51where a lot of non-controllable assets are incentivized to produce at any hour of the day,
04:57and so get their subsidies even when prices turn negative,
05:03which is, again, a strange thing,
05:05or simply because the generation mix in the countries is not flexible enough.
05:10So ramping down specific assets becomes more expensive
05:14than just keeping them online and setting the power at negative prices.
05:18So these are usually, I would say, things that are of a transitionary nature.
05:23In the long run, I think that negative prices will basically disappear,
05:28and the overall level of sort of price level will be ultimately determined by,
05:32what you say, the equilibrium between supply and demand.
05:35As you say, it will right itself with time.
05:39But until that happens in the meantime,
05:41what are the costs or disadvantages of negative prices for energy?
05:47It's a difficult question, of course.
05:50The ones who sort of keep their assets online despite the prices being negative
05:54and not being subsidized, they do suffer.
05:56In general, for a place like Nkavis, it's not a real cost.
06:01It's like a revenue which ends up being lower than we might have expected
06:05at the time of the investment.
06:08Industry experts say the solution to the problem of too much solar power generation
06:13isn't to have less, it's to have ways of distributing that power to the places
06:17and at the times it's needed most.
06:20So the negative electricity prices are really related to the time challenge,
06:24while we're seeing the containment really related more to the physical challenge
06:28of transporting electricity from where it's generated to where it's needed.
06:33And energy storage can help address both of those.
06:36Julian Janssen is a managing director at Fluence,
06:40one of the largest utility-scale battery storage companies operating in Europe.
06:45On the outskirts of Zerbst, an historic town in East Germany,
06:50Fluence built 57 megawatts of battery facility
06:53to handle power generated by the adjoining solar panels.
06:56It stores enough electricity to power nearly 14,000 households.
07:01When the site came online in 2025,
07:04it was Germany's largest hybrid solar and storage project.
07:08Today, it's modest compared to a new generation of batteries
07:12measured in the hundreds and even thousands of megawatts.
07:16At what rate is the storage growing in Europe?
07:19The battery energy storage is coming from quite a low base.
07:23So, you know, people might see it as a new technology.
07:25It is by now very established, in particular in Europe.
07:28We've had deployments now really over the last decade.
07:30But at the beginning, it really was a smaller level of application
07:35and a smaller scale.
07:35We are now really out of that period.
07:38So last year alone in 2025,
07:41Europe installed around 36 gigawatt hours of battery energy storage.
07:45And if we now look at some of the projections,
07:47we would expect the installed base in Europe
07:50to reach over 500 gigawatt hours by 2030.
07:54So you're now going through a rapid acceleration
07:56and year-on-year significantly larger installation levels.
08:01What is the role of storage,
08:02which is your area particularly, in solving the problem?
08:06So a very simple equation that just shifts electricity
08:08from hour one to hour two or any hour within the day
08:12to better match when electricity demand is high
08:17versus the way electricity is supplied.
08:20Here we see the storage system,
08:24which will store excess energy that is not used right away.
08:29A battery boom is also happening
08:31for smaller residential solar systems.
08:33What has changed is that we used to have a lot of systems
08:38that had no battery storage.
08:39But since battery storage is so much cheaper today,
08:43almost all of our systems come with battery storage
08:46and bigger battery storage as well.
08:47But there is also a third leg
08:50to the solar power stool in Europe.
08:52Beyond generating the power and being able to store it,
08:56there needs to be a way of distributing it efficiently.
08:59As far as we can see,
09:01how much more storage needs to be generated
09:03to bring the supply and demand back into balance?
09:06Is that 500 gigawatts by 2030, will that be enough?
09:09So that will certainly make a start.
09:11So as you're deploying storage,
09:12you also need other flexible generation technologies.
09:15You need to also address the demand side.
09:18And in that interplay, it plays a critical role.
09:21It also will not replace the need to reinforce our grids, right?
09:25Just to be very clear,
09:26storage has a role to play to be complementary,
09:29but we have to also reinforce our grids at the same time.
09:33And therefore, it's not necessarily a silver bullet
09:35of you need to build a certain amount of energy storage
09:37to address a certain constraint,
09:40either on the market side, on the grid side.
09:42But it's really about how does it interplay
09:44with other technologies and other investments
09:46that we're making into our energy infrastructure.
09:49Is there substantial capital required
09:51for doing what needs to be done to the grid?
09:54Is it a matter of rebuilding the infrastructure,
09:56or is it a matter of using what you have more efficiently?
09:59I would say definitely the investment into the grid
10:02will be important.
10:04And this is something that we have to accept
10:07if we want to make the energy transition succeed.
10:11At the same time,
10:12the grid is operating in a very conservative way
10:14for good reasons.
10:15And we see good signs
10:17and good sort of steps going in this direction.
10:21Skira says he expects this transition to be short,
10:24though challenging,
10:25as the solar market finds its footing
10:27in the supply and demand equilibrium.
10:29And perhaps Skira's optimism
10:31comes from the strong appetite
10:33for renewables across Europe.
10:35We're seeing market conditions
10:36we've never experienced before.
10:39When investment conditions are right,
10:41perhaps when the right market frameworks
10:43are put in place by a government,
10:45investors turn up in volume.
10:47And they have the capability
10:49of delivering technology,
10:50supply technologies,
10:52battery technologies very quickly.
10:54into power systems
10:55which traditionally moved
10:57at a very pedestrian pace.
11:00So it's still kind of
11:01almost the growing pains of decarbonization
11:03when we get to the point
11:04where we've left the early easy stages behind
11:07and it gets a little bit more serious
11:09and a little bit more difficult.
11:11If everything went the way
11:12you would like it to go,
11:13how big could it get?
11:14The limiting factor
11:15is not the investment appetite
11:16and the ability to build more solar,
11:19but it's really around building the grid
11:21and the infrastructure around it now
11:23to efficiently use it
11:25and to make sure we can use it
11:26at the times when it's most needed.
11:28And I think if you can solve
11:30that piece of the puzzle,
11:31there's really no limit
11:32on the growth scenario
11:33that we can see
11:34over the coming decades in Europe.
11:36Europe has made remarkable progress
11:38toward its renewables future,
11:40generating unprecedented levels
11:42of solar power.
11:43But in doing so,
11:44it's experiencing some growing pains
11:46in getting the other parts of storage
11:48and distribution to catch up.
11:50This is our battery.
11:51This is fully loaded at the moment,
11:53so we sell the energy to the grid.
11:54In the meantime,
11:56it's given citizens like Hein
11:57a powerful incentive
11:59to find more ways of going green.
12:01Yeah, the idea is now for us,
12:03that we try to even more
12:04to use even more electricity
12:05to use.
12:06And for example,
12:08that we want to have
12:09a electric car
12:11or that we want to use
12:13a climate device
12:14to use a lot of electricity
12:16to use,
12:17which is now for us
12:18almost a cost of energy.
12:19Also the idea,
12:21how we deal with electricity
12:21has radically changed,
12:23because the more electricity
12:25we spend,
12:25the more electricity
12:27we spend,
12:28the faster our solar power
12:29will be spent.
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