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.
Table of Contents
October 2024
Evolution of demand and production mix
During the month of October, renewable energy sources contributed 55.86% of the total energy production. Specifically, wind energy accounted for 26.26% of the total mix, while hydropower contributed 13.76%, photovoltaics provided 13.37% and nuclear energy represented 21.33%. Good water reserve levels may keep hydropower production at these levels. The availability of water storage in Spain was at 64.9%, higher than the previous year’s the 45.6%.
The total energy generated during this month was 21,626 GWh. In terms of electricity demand, there was an increase from 19,731 GWh in September to 20,135 GWh in October. In comparison with October 2023, when demand was 19,824 GWh, there has been a slight increase in demand.
Also, electricity exports amounted to 914 GWh during the month, more than double compared to the same period last year. In addition and aligned with REE, the installed capacity of photovoltaic solar energy reached 29,646 MW in October 2024, an 18.1% increase compared to the previous year. Furthermore, the PNIEC forecasts that this trend will continue until 2030, further supporting Spain’s electricity exports.
The average electricity price for October was 70.15 €/MWh. The highest spot hourly price reached was 181.00 €/MWh on October 21st, while the lowest was -0.01 €/MWh on the 6th and 20th of October.
Gas Prices
In the Spanish gas market, there has been an increase in the average spot price from 36.60 €/MWh in September to 40.41 €/MWh in October. The maximum prices reached were on the 26th and 27th of October, with 44.63 €/MWh and 44.35 €/MWh respectively. The increase in gas price is reasonable due to the increase in CO2 emission allowance during these weeks and the TTF gas futures reached a maximum of 43,51 €/MWh.
Storage levels have remained at very high values, exceeding 100%, which is highly favorable for future price stability.
Fuels
Regarding the forecast for Brent crude oil prices in the coming months, the projected monthly average prices were as follows: 75.38 $/bbl for December, 74.95 $/bbl for January and 74.56 $/bbl for February. The maximum prices are expected to reach 80.93 $/bbl, 80.35 $/bbl, and 79.82 $/bbl, respectively. Therefore, the average prices continue their upward trend throughout the months of September and October.
Since Iran’s attack on Israel on 1st October, the oil market has experienced significant volatility due to weak demand and oversupply. Despite concerns over the potential impact on Iranian production, experts are reassured that Saudi Arabia’s excess capacity can compensate for any shortfall.
At the end of the month, oil prices fell sharply after Israel’s retaliatory strikes on Iran targeted military sites without disrupting oil or nuclear facilities. Despite ongoing tensions, the market’s risk premium on prices significantly decreased. In addition, the IEA has revised its global oil demand forecast downward, and some analysts expect a gradual decline in prices over the coming years.
In terms of CO2 EUA, the price for December’24 decreased to 63.93 €/t in October from 65.51 €/t in September. Similarly, the price for December’25 has also declined, falling to 65.94 €/t from 67.66 €/t in the previous month.
Future contracts trends
It is expected that electricity prices will continue to rise until January due to the winter season. In line, the mean price for January’25 is 84.42 €/MWh. During the following months, a decrease in this trend is forecasted until March, when mean prices are expected to reach 53.52 €/MWh. Instead, the prices for the first two quarterly products in 2025 have decreased. In October, the mean price for Q1’25 fell from 71.82 €/MWh in September to 70.89 €/MWh, and the mean price for Q2’25 dropped from 51.41 €/MWh in September to 47.53 €/MWh in October.
Looking at the long term, the power price for Cal’25 decreased from 71.31 €/MWh in the last month to 69.11 €/MWh, and from 63.09 €/MWh to 62.89 €/MWh for Cal’26.
The MIBGas contracts for October closed Q1’25 at 40.65 €/MWh, Q2’25 at 38.72 €/MWh. In comparison with September, all of them increased since the same products were at Q1’25 at 38.25 €/MWh, Q2’25 at 36.65 €/MWh. In line with the downward trend of the power prices for these periods, the trends can be justified by the high levels of gas storage in Spain and the decrease in gas demand for the second quarter of 2025 plus the current decrease in gas prices.
In September, the gas price of Cal’25 saw a decrease to 37.17 €/MWh and to 32.65 €/MWh for Cal’26 in comparison with August. However, in October was an increase to 39.10 €/MWh and 33.79 €/MWh for Cal’25 and Cal’26 respectively.
Regarding the EUA ETS, EUADec’25 decreased to 65.94 €/t in October from 67.66 €/t in September, and EUADec’26 also was reduced from 69.82 €/t in September to 67.98 €/t.
Regarding regulatory news, the European Commission will present an action plan aimed at reducing energy system costs, including grid charges, taxes, and levies, which currently account for one-third of electricity bills. The plan will also seek to improve grid planning and optimize the use of existing energy infrastructure. Additionally, efforts will be made to facilitate access to Power Purchase Agreements (PPAs) as part of efforts to decouple electricity prices from the volatile prices of fossil fuels. The action plan will address all components of energy pricing, including financial markets for energy commodities. There is no doubt of the potential of PPA’s to improve the power market in Spain, assuring stable prices and increasing the potential for industrial demand growth.
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%
