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
February 2025
Key figures of the month
In February 2025, the main European electricity markets experienced a significant upward trend, with price levels reaching heights not seen since early 2023. With the exception of Spain, prices surpassed €120 per MWh. This increase was largely driven by a reduction in renewable generation due to a lack of storms and wind, prompting a shift toward non-renewable power generation and resulting in higher electricity prices.
Meanwhile, the gas market also continued its upward trajectory. The average price for February 2025 remained in a growth phase, consolidating the trend observed in previous months and reaching levels similar to those recorded at the beginning of 2023. This situation puts additional pressure on energy costs, which may affect the competitiveness of the industrial sector.
Lastly, it is worth highlighting that the CO2 EUA Dec’25 showed a decline in the Feb’25 price compared to the level recorded in Jan’25. Similarly, Coal ARA CIF Y+1 has also experienced a drop from the previous month.
Energy demand and generation mix
In Feb’25, electricity demand in Spain reached 19,871 GWh, while generation totalled 21,321 GWh. Both figures were lower than those recorded in Jan’25 but remained at similar levels to those from Feb’24.
Renewable energy sources accounted for 54.1% of total generation in Feb’25. However, during this period, nuclear power became the leading source of electricity production. Hydropower ranked second, experiencing a significant surge from 12.8% in Jan’25 to 20.2% in Feb’25, representing a 40% increase in its contribution compared to the previous month. Wind, photovoltaic, and combined cycle followed in the generation ranking.
A particular note mention is the sharp decline in wind power generation, which dropped from being the primary source in Jan’25 to the third position in Feb’25. Overall, its contribution was cut in half compared to both the previous month and February 2024. This decline has had a significant impact on the energy mix.
Source: Haya Energy Solutions
Energy prices & market panorama
The average electricity price for Feb’25 reached 108.21 €/MWh, exceeding both the Jan’25 average price and the 100 €/MWh threshold. However, the most striking comparison is the year-on-year variation, as in Feb’24 the average electricity price was 41.22 €/MWh, representing an increase of over 260%.This sharp rise has been primarily driven by the surge in natural gas prices and CO₂ emission costs, two key factors behind the sustained upward trend in the electricity market.
Combined cycle power plants play a dominant role in electricity price formation, ensuring supply stability when renewable generation is low. However, their cost structure is highly dependent on gas prices (which account for 75% of their cost) and CO₂ emission allowances (which contribute the remaining 25%). With both components at historically high levels, spot electricity prices remain under significant upward pressure.
The combination of lower wind power generation and higher fossil fuel costs has created a market environment characterized by increased volatility and elevated prices, reinforcing the trend observed in recent months. In Spain, the expansion of renewable energy sources is increasing the impact of weather conditions on electricity price volatility. The growing share of wind and solar power makes the market more sensitive to meteorological patterns, leading to sharper price fluctuations.
Source: Haya Energy Solutions
Source: Haya Energy Solutions
The Feb’25 average gas price in MIBGAS stood at 50.33 €/MWh, extending a four-month consecutive upward trend. With this rise, gas prices reached their highest level since Feb’23, reflecting the persistent bullish pressure in recent months.
Price movements throughout the month showed two distinct phases. During the first ten days, prices remained high with an upward trend, peaking close to 58 €/MWh. This increase was primarily driven by low wind power generation, which led to greater reliance on gas-dependent technologies, as well as colder than usual winter temperatures. Additionally, geopolitical instability in the EEUU and a decline in gas storage levels further reinforced this upward trend.
From February 10th onwards, a downward correction phase began, with prices gradually declining to close the month below 45 €/MWh, representing a drop of over 20% from the month peak. This adjustment was driven by a diplomatic rapprochement between the EEUU and Russia, easing tensions in energy markets, as well as expectations of a relaxation in gas storage targets. Furthermore, improved weather conditions, supported by increased rainfall in the latter half of the month, helped to relieve pressure on prices.
Regarding gas storage levels, current reserves stand at 62.15%, below historical averages. This situation is driven by the winter, a significant drop in wind power generation and geopolitical tensions, all of which have influenced gas market dynamics in recent months.
Market trends and futures
Source: Haya Energy Solutions
The mean price for the following months shows a decrease until April’25. However, the mean price for May’25 rises again. Additionally, it can be observed that the mean price for these months in Feb’25 is lower than in Jan’25. The same trend is seen for the next two quarters and years, with prices lower than those in Jan’25.
Regarding the gas market, futures have shown an upward trend compared to Jan’25, aligning with the increase in average prices recorded in February. However, several key factors will shape its short-term and medium-term evolution. First, U.S. gas supply could rise after President Trump issued an executive order to lift the restrictions imposed by the Biden administration on LNG exports. This move could increase global gas availability.
Additionally, the European Commission is considering easing gas storage recovery requirements, which would allow for greater flexibility in European demand and potentially ease price pressures. Furthermore, China has announced a 15% tariff on LNG imports from the U.S., which could lead to a redirection of gas shipments toward the European market, increasing regional supply.
Lastly, a potential peace agreement in Ukraine might include provisions for the partial restoration of Russian gas exports to Europe, a development that, if realized, would significantly impact gas prices and the continent’s energy supply structure.
Meanwhile, OPEC+ has confirmed its plan to gradually increase oil production starting in April, with an initial rise of approximately 138,000 barrels per day. Additionally, the organization remains committed to its roadmap to expand production by 2.2 million barrels per day over the next 18 months, which could influence crude oil prices and, consequently, the competitiveness of fossil fuel-based power generation technologies.
Regulation
There were no significant regulatory developments in Spain’s energy sector in February 2025.
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%
