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.
December 2025
Table of Contents
Key figures of the month
Over the last month, electricity spot prices in European markets have differed from those in previous month. Germany and the UK saw a marked month-on-month decline, while Spain and France recorded higher average prices. Italy was broadly unchanged. In contrast, looking at Power Cal’26, we can see that all countries have experienced a downward trend compared with the previous month, pointing to a softer medium-term pricing outlook.
In terms of price levels, France recorded the lowest monthly average on the continent at 68.73 €/MWh, overtaking Spain. The UK (75.27 €/MWh) and Spain (77.90 €/MWh) followed at broadly similar levels, while Italy remained the highest-priced market at 115.48 €/MWh.
Market fundamentals, particularly renewable generation patterns and weather, were the primary drivers of price movements through December
During the first week of the month, most major European power markets experienced lower prices, bolstered by increased wind and PV output, as well as gas prices reaching their lowest level since April 2024.
Prices fell again across most markets in the second week as milder temperatures reduced demand and gas prices softened further. The main exception was the Iberian market, where prices increased.
During the third week, prices increased slightly in most markets due to colder weather, higher gas and CO₂ prices, and a change in the renewable energy mix (more wind and less solar). CO₂ prices reached their highest level since October 2024.
In the fourth week, prices fell again due to lower holiday demand and increased wind and PV generation. PV hit record daily generation highs for December in Germany, Italy and France.
Energy demand and generation mix
In December 2025, Spain’s electricity demand totalled 22,581 GWh, while total generation reached 23,209 GWh. Of this output, around 628 GWh was scheduled for export to other countries.
Compared with November 2025, both demand and generation increased, confirming a stronger end-of-year consumption and supply profile. Looking at the full-year picture, electricity demand rose by 2.7% in 2025 vs 2024, returning to levels observed prior to 2021. In this context, the system operator noted that when adding an estimate of electricity produced by self-consumption installations, demand would be broadly in line with pre-Covid-19 years.
On the supply side, electricity generation increased by 3.6% in 2025 vs 2024. The fact that generation grew more than demand reinforces Spain’s expanding role as a structural net exporter of electricity. 2025 was the fourth consecutive year with a net export balance, which increased by c.25% year-on-year to almost 13 TWh.
In December 2025, renewable energy sources accounted for 48.9% of total generation mix. This was lower than in November (when renewables covered 56.7% of the mix), but slightly higher compared with 48.0% in December 2024.
During the last month, wind remained the leading generation source in Spain, contributing 23.2% of total output. This was well below November’s 31.7%, but broadly in line with December 2024 (23.6%).
CCGT ranked second, accounting for 21.0% of the national mix, closely followed by nuclear at 20.7%. A key nuclear milestone during the month was the reconnection of Vandellós II to the grid, following the successful completion of its refuelling outage, marking the start of a new operating cycle.
In fourth place, hydro increased its contribution month-on-month, rising from 9.0% in November to 14.0% in December.
From an annual perspective, Red Eléctrica reported that 57.6% of electricity generated in Spain in 2025 came from renewable sources, a slight decrease versus 59% in 2024.
Source: Haya Energy Solutions
Despite this marginal drop in the renewable share of generation, Spain surpassed 100 GW of installed renewable capacity in 2025. In terms of output, solar PV, combining utility-scale generation and self-consumption, became the country’s leading electricity source, producing over 60 TWh during the year. It was followed by wind (c.58.7 TWh) and nuclear (c.51.8 TWh). This new leadership of solar reflects the continued rise in renewable penetration and confirms the acceleration of Spain’s energy transition towards low-carbon technologies.
In addition, 2025 saw a more prominent role for CCGTs, which strengthened their contribution to system stability, particularly in response to heightened reliability needs following the blackout of the system.
Energy prices & market panorama
Source: Haya Energy Solutions
In December 2025, the average wholesale electricity price in Spain stood at 77.91 €/MWh, a 33% month-on-month increase versus Nov’25. Despite this rebound, Dec’25 average price was 30% lower year-on-year, falling from 111.24 €/MWh in Dec’24.
The month was also marked by significant price dispersion, underscoring the market’s short-term volatility. For instance, on December 7th the daily average price stayed below 33 €/MWh, while on the 10 th, 17th, 19th and 29th December daily averages exceeded 100 €/MWh. This pronounced variability highlights a growing market sensitivity to weather-driven demand, as well as to the availability and profile of renewable generation.
Spain’s wholesale electricity price closed 2025 with an annual average price of 65.28 €/MWh, which is 4.2% higher than in 2024 (62.90 €/MWh). This year-on-year increase is largely due to the exceptional weather conditions recorded in spring 2024, which caused prices to fall sharply and distorted the base effect used for annual comparisons.
However, looking beyond the headline annual average and focusing on the second half of 2025, wholesale prices show a material downward trend, with levels almost 20% lower than in the same period of 2024. This illustrates how, despite a slightly higher full-year average, market dynamics in the second half of the year shifted towards lower price formation.
In December 2025, the average natural gas price in the Spanish market stood at 27.84 €/MWh, down from 30.12 €/MWh in November, confirming a clear month-on-month decline. The decrease was largely driven by abundant US LNG supply, which weighed on European hub prices throughout the month.
Notably, December was the first month since March 2024 in which day-ahead gas prices remained below 30 €/MWh for the entire month, a meaningful threshold from a market sentiment and dispatch perspective. Overall, mild temperatures and a strong LNG inflow helped cap early-winter upside risk, despite lower gas storage levels compared with prior periods.
On a full-year basis, Spain’s gas market closed 2025 with an annual average price of 36.06 €/MWh, a 3.8% increase year-on-year versus 2024.
Market trends and futures
Source: Haya Energy Solutions
During December 2025, Spanish electricity forward prices were characterised by a generalised decline. The most notable movement was a 12.8% decline in February 2026, likely driven by unseasonably mild temperatures, as well as the downward trend in gas prices.
In the gas market, significant declines were observed across all products and time horizons analysed, mainly supported by external factors. From a weather perspective, Europe experienced unusually mild temperatures for this time of year. For example, a key market such as Germany recorded temperatures 5°C above the average. In addition, LNG demand in Asia has been decreasing, with China reducing demand by 17% and Japan by 7%. This has resulted in higher LNG availability, particularly from the US. Moreover, production in Norway remained stable, with no notable issue.
The situation in Venezuela and its potential impact on the market must be closely monitored: for now, recent events have had a limited short-term effect on gas prices, but expectations of future developments may have an impact on future.
Regarding storage levels, natural gas reserves in the European Union currently stand at 61.97% of capacity versus 72.16% in 2024, notably below the 90% target. This is particularly relevant as winter approaches, when gas consumption typically rises due to heating demand. In Spain, gas reserves currently stand at 67.76%, compared to 82.49% in the same period of 2024.
Finally, EU carbon allowance (EUA) forward prices for December 2026 and December 2027 increased by more than 3% compared to the previous month. This upward move continues to put pressure on carbon-intensive technologies and could exert upward influence on electricity prices in the medium term.
Key news of the year
To close our last market analysis of the year, we summarise below the key national (Spain) and European news and market signals.
At national level (Spain):
- 28-Apr blackout: operational lessons and the cost of resilience: The “zero” event on 28th April has shaped the year, increasing the focus on security of supply, reserves and a more conservative operational approach, with a direct impact on costs and emissions.
- Renewables record and price cannibalisation: Solar and wind pushed the generation mix to new highs but also multiplied the number of hours with very low/zero prices, putting pressure on spot-based revenues and increasing the value of flexibility.
- Coal off the radar: the system relies on gas and renewables: Coal generation was marginal. Decarbonisation continues to advance, but combined-cycle gas, storage and demand-side management become increasingly critical during tight hours.
- Emissions: the challenge is no longer to install, but to integrate: As renewable capacity continues to grow, the key challenge shifts to integration (grids, curtailment, ramps) and demand electrification; otherwise, the emissions curve flattens.
- 15-minute spot market: new signals for trading and flexible assets: Clearing and delivery in 15-minute intervals makes pricing more granular: it increases opportunities for batteries and flexible demand, but requires more robust systems, forecasting and imbalance management.
At European level:
- Gas: price normalisation, but with latent volatility: Gas has returned to more moderate levels versus the previous years’ crisis, easing marginal power generation costs. However, the market remains highly sensitive to LNG dynamics, weather and geopolitics.
- Solar overtakes coal: the market’s new “floor” moves lower: The growing share of solar displaces coal and drives more hours of low prices. Profitability shifts towards flexibility, firm capacity and grid services.
- 2040 target: a more demanding regulatory signal: The European climate target raises ambition and tightens the investment framework, increasing pressure to electrify processes, replace fossil fuels and accelerate investment in low-carbon technologies and development.
- Storage: acceleration as system “insurance”: Batteries scale up to integrate renewables, arbitrage intraday prices and provide stability. Flexibility shifts from “optional” to a strategic asset.
- Gas storage rules: 90% with greater flexibility: The EU maintains filling targets but introduces more flexibility in compliance to reduce price tensions and improve system efficiency, especially in tight supply scenarios.
SP Baseload Power price (€/MWh)
SP Peak load Power price (€/MWh)
EUA price (€/t)
MIBGas price (€/MWh)
Coal Price ($/Tn)
Gas efficiency: 52%
Coal efficiency: 38%
Gas vs. Coal Price (€/MWh)
Gas efficiency: 52%
Coal efficiency: 38%
