Spanish Market Analysis
Analysis of the Spanish energy market is key to understanding the dynamics and trends affecting the sector both locally and internationally. In this detailed analysis, we address the important factors influencing energy prices, supply and demand, and the latest regulatory policies. This comprehensive overview will allow you to keep up to date with weekly changes and anticipate possible market variations, both in Spain and in other relevant markets such as France.
March 2026
Table of Contents
Key figures of the month
Source: Haya Energy Solutions
In March 2026, electricity spot prices across the main European markets moved sharply higher compared with the previous month. A similar upward trend was also observed in Power Cal’27, with all countries posting month-on-month increases, although forward price levels remained within a relatively similar range to those seen in February.
Spain remained the lowest-priced power market in the region, averaging 40.27 €/MWh, despite a sharp increase from 15.08 €/MWh from the previous month. France ranked as the second-lowest market, with an average of 63.30 €/MWh, while the UK and Germany both moved close to the 93 €/MWh level. Overall, March once again showed a wide divergence in spot prices across Europe, largely reflecting each market’s generation structure and, in particular, its level of exposure to gas-fired technologies as the marginal price-setting source, as is reflected in Italy.
On the gas side, spot prices were broadly stable around the 50 €/MWh mark across most markets, with Germany standing slightly higher at around 55 €/MWh on average. Compared with February, gas prices increased across all countries, mainly driven by heightened geopolitical tensions in the Middle East and the disruption risk linked to the Strait of Hormuz, a key route for global oil and energy flows. Gas Cal’27 also recorded a relevant month-on-month increase across all markets.
As for CO₂, prices declined from around 75 €/t in February to 72 €/t in March, reaching their lowest closing levels since April 2025.
Overall, despite the strong upward pressure on energy prices caused by higher gas prices, stronger renewable generation and lower CO₂ prices helped to partially contain the rise in electricity market prices. This combination provided some downside offset in an otherwise bullish gas-driven environment.
Energy demand and generation mix
Source: Haya Energy Solutions
In March 2026, electricity demand in Spain reached 21,182 GWh, while total generation stood at 22,942 GWh. Of this volume, around 1,760 GWh was scheduled for export.
Compared with February 2026, both electricity demand and generation increased. Year on year, demand and generation in March 2026 were still lower than in March 2025.
Renewables represented 63.1% of Spain’s generation mix in March 2026, up from 61.2% in March 2025 and broadly stable versus February 2026 (63.2%). This confirms the continued strong contribution of renewable technologies to the Spanish power system.
Wind remained the leading generation source, accounting for 22.4% of total output. Even so, its share was lower than in February 2026 (29.2%) and also below the 28.4% recorded in March 2025. Hydropower ranked second, reaching 18.5% of total generation
PV ranked third, also contributing 18.5% of total generation, showing a strong increase compared with both February 2026 (11.8%) and March 2025 (13.1%). Notably, the three largest technologies in the generation mix during March were all renewable and non-gas based. This dynamic played an important role in limiting the need for gas-fired generation during peak hours and, in turn, supported lower power prices.
Nuclear ranked as the fourth-largest source of generation, with a 17.1% share of total output in March, slightly below both the previous month and the same month last year. The key development for this technology was the outage at the Almaraz nuclear power plant, which started on 28 March for the refuelling of Unit 1 and is expected to last approximately one month.
Source: Haya Energy Solutions
This outage is particularly relevant as it could mark the final refuelling of the plant’s first reactor, whose planned closure is scheduled for the end of October 2027 under Spain’s nuclear phase-out roadmap.
At the same time, the operators of the plants affected have submitted a request to the Ministry for an extension of the operating licences of both Almaraz units until June 2030. The Spanish Nuclear Safety Council is expected to assess a potential extension during the coming summer.
Energy prices & market panorama
Source: Haya Energy Solutions
In March 2026, the average wholesale electricity price in Spain stood at 40.27 €/MWh. This represents a sharp increase compared with February (15.08 €/MWh), mainly driven by higher gas prices, which had a significant impact during periods when gas-fired technologies were required to meet demand.
The month was characterised by exceptionally high price dispersion. On some days, the average daily price approached 140 €/MWh, as seen on 10 March, while on others it turned negative, reaching -12 €/MWh on 29 March. Volatility was also particularly visible within individual days. On 16th March, for example, prices were close to 0 €/MWh at 16:00pm and 17:00pm, before rising to 180 €/MWh at 19:30pm. This represented an increase of 180 €/MWh in little more than two hours, coinciding with the evening decline in solar generation.
This behaviour reflects the Spanish market’s strong sensitivity to weather conditions, renewable generation availability and gas prices. When demand can be largely covered by renewable technologies, prices can fall to very low or even negative levels. However, once gas-fired generation becomes necessary to balance the system, prices tend to rise sharply. As a result, the market can experience substantial hour-on-hour fluctuations and elevated volatility. This pattern illustrates the growing intraday volatility of the Spanish power market, where price formation is increasingly shaped by renewable intermittency and the marginal role of gas-fired generation during non-solar hours.
In March 2026, the average natural gas price in the Spanish market stood at 51.92 €/MWh, rising sharply from 31.30 €/MWh in February. This significant increase was mainly linked to heightened geopolitical tensions involving Israel, the United States and Iran, which added risk premium and upward pressure to gas prices.
The most notable feature of the period was the strong price volatility triggered by headlines and announcements related to the evolution of the conflict. Market sentiment reacted quickly to any new signal, leading to sharp upward or downward movements depending on the nature of the news. In this context, two major price spikes were observed, at the beginning of the second and third weeks of the month.
Source: Haya Energy Solutions
Market trends and futures
Source: Haya Energy Solutions
During March 2026, Spanish electricity forward prices posted a broad-based increase, breaking the general downward trend seen over previous months. The most notable moves were the almost 35% increase in April 2026 and May 2026 forward prices. A similar upward movement was also observed in the Q+1 product. These increases were mainly driven by the sharp rise in gas prices, which moved away from the low levels seen in recent months and surged during March due to the escalation of tensions in the Middle East, with a significant impact across energy markets.
Given the relevance of this event for energy markets, it is addressed in a dedicated section of this market analysis.
In the gas market, month-on-month increases were even more pronounced than in power. Forward gas prices for April 2026, May 2026 and even Q2 2026 recorded increases of more than 70% compared with the previous month, marking an exceptional repricing in just one month. Further along the curve, however, the increases were more moderate: Y+1 rose by around 36%, while Y+2 increased by approximately 15%. This suggests that the market may still be pricing in some degree of easing in the conflict over the medium to longer term.
Regarding storage levels, natural gas reserves in the European Union currently stand at 28% of capacity, slightly below the 30% recorded the previous month. Storage levels this low may leave the European Union more exposed to price tensions ahead of next winter if market conditions do not improve. In Spain, gas reserves currently stand at 57.76%, slightly below 58.03% in the previous month, but still around twice the EU average.
By contrast, CO₂ futures were the only major energy-related product to move lower during the month, offering a limited offset to the broader upward repricing seen across gas and power forwards.
Key news and implications
In March 2026, the conflict involving Israel, the United States and Iran became a direct energy-market driver rather than just a geopolitical risk premium. The main transmission channel was the disruption to shipping through the Strait of Hormuz, which normally carries around 20 mb/d of oil and oil products and all LNG exports from Qatar and the UAE. As flows dropped sharply, Brent and Dutch TTF both rose by more than 60% during the month.
For Europe, the main vulnerability was gas. Tighter LNG availability, rising freight and insurance costs, and stronger competition with Asia pushed delivered gas prices higher just as EU storage levels stood at around 28% by late March, a weak starting point for the refill season. This translated into higher marginal costs for gas-fired generation and stronger upward pressure on power prices, including in Spain, especially during low-renewable and non-solar hours.
Although stronger renewable output and lower seasonal demand helped to cushion part of the impact, the conflict clearly reinforced the sensitivity of European energy markets to gas supply risk, particularly in the short term.
Against this backdrop Spain approved Royal Decree-Law 7/2026 in March as part of the government’s response to the Middle East crisis. For the energy market, the most relevant measures include temporary flexibility to adjust contracted electricity capacity without penalties until the end of 2026, the reactivation of support for electro-intensive industry through an 80% reduction in grid access charges during 2026, and a temporary cut in the electricity tax from 5.11% to 0.5% until 30 June 2026. Overall, the package is designed to mitigate the impact of higher energy prices on industrial consumers and electricity bills, while preserving competitiveness in an environment of elevated market volatility.
