Negative electricity prices are becoming more common in Spain, challenging the traditional risk allocation in PPAs where producers bear most of the risk.
• Lenders are now pushing for more balanced risk-sharing to protect producers and ensure renewable projects remain viable, with certain unilateral risk allocations no longer accepted.
• Some lenders now refuse to provide debt financing for projects with PPAs where producers bear all negative price risks, especially if no compensation is provided for both negative and zero-priced hours.
• Often, debt-to-equity ratios are dropping below 50%, requiring developers to contribute more equity.
