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
January 2025
Evolution of demand and production mix
In January, the contribution of renewable energy sources to total energy production increased to 55.56%, up from 47.64% in the preceding month. Wind energy constituted 30.8% of this total, while hydropower accounted for 13.2% and photovoltaic (PV) systems contributed 9.4%. Concurrently, nuclear energy represented 21.4% of the overall production, and combined cycle gas turbine (CCGT) plants accounted for 14%.
A number of significant developments transpired in comparison with the previous month. Notably, there was a substantial rise in the output from weather-dependent technologies, with wind energy increasing by 33% and hydropower by 18%. These fluctuations were primarily the result of storms impacting Spain in January, particularly Storm Herminia, which substantially enhanced wind generation and contributed to a decrease in electricity prices.
Furthermore, the share of nuclear energy also rose by 15% from the previous month. This increase is linked to the reconnection of Unit 1 at the Ascó nuclear power plant to the grid during the last week of December, following the successful completion of scheduled refuelling and maintenance activities.
Conversely, the advancement of renewable technologies resulted in a 38% reduction in the contribution of CCGT compared to the prior month.
The total energy generated in January amounted to 24,360 GWh. In terms of electricity demand, a 5.31% increase was recorded, rising from 21,647 GWh in December to 22,796 GWh in January, driven by lower temperatures. This figure was also greater than that observed during the same period in the previous year, when demand totaled 23,354 GWh.
As illustrated in Figure 1, the electricity market in January 2025 exhibited considerable price fluctuations in contrast to January 2024. The average electricity price for January 2025 was 96.45 €/MWh, which signifies a 13.65% decrease from the average price of €111.70/MWh recorded in December 2024. However, when compared to January 2024, which had an average price of 73.76€/MWh, this reflects a year-on-year increase of 30.76%. Furthermore, the median price approached 110 €/MWh, indicating that this was the prevailing market rate for the majority of the time. The escalation in prices can be directly attributed to heightened demand, lower temperatures, and the observed increase in gas prices. Nevertheless, the average price for January 2025 remained below 100€/MWh, owing to favorable wind conditions in the final week of the month. The highest hourly price recorded during January was 225.00€/MWh on the 15th, while the lowest was 0.00€/MWh on the 30th.
Source: Haya Energy Solutions
Gas Prices
In the Spanish gas market, the average spot price experienced an increase from 46.33€/MWh in December to 48.40€/MWh in January. This represents a significant rise of 61.50% compared to the average spot price for January 2024, which was recorded at 29.97€/MWh. The highest price observed during the month was 53.49€/MWh on January 1st, whereas the lowest price was noted at 45.10€/MWh on January 9th.
This increase in gas prices can be attributed to a rise in global demand, predominantly driven by increased consumption in Asia. Furthermore, the suspension of the pipeline that previously transported Russian gas through Ukraine has heightened the necessity for liquefied natural gas (LNG) imports by sea to Europe. This situation may have repercussions for the global market, potentially exerting upward pressure on prices.
Additionally, storage levels witnessed a substantial decline, decreasing from over 82.47% at the beginning of December to 72.26% by the end of the month. While these storage levels remain adequate to fulfill energy requirements, they indicate a 9.36% decrease compared to the previous year, when levels stood at 81.62%.
Fuels
Regarding the forecast for Brent crude oil prices in the coming months, the projected average monthly prices are as follows: 78.42 $/bbl for March, 77.43 $/bbl for April and 76.65 $/bbl for May. The expected maximum prices are 82.03 $/bbl, 80.66 $/bbl and 79.48 $/bbl, respectively.
Throughout the month of January, Brent Crude has experienced an increase, surpassing 80 $/bbl for the first time since last October. The rise in prices is attributed to the announcement by the United States of a new set of sanctions targeting the Russian energy sector.
As a result, starting February 27th, the Department of State will prohibit the provision of U.S. oil services to individuals located in Russia, cutting off the country’s access to American services related to crude oil extraction and production, as well as other petroleum products.
In terms of CO2 EUA, the price for December’26 is 80.52 €/t similar to 71.07 €/t in December. The price for December’27 is even higher, reaching 83.19 €/t.
Future contracts trends
Electricity prices are anticipated to maintain an upward trajectory, with the mean price for February 2025 estimated at 90.96 €/MWh. However, a decline in prices is projected for the subsequent months, with March 2025 anticipated to have a mean price of 61.61 €/MWh, followed by a more significant decrease in April 2025 to 46.73 €/MWh. The price is expected to experience a slight increase in May 2025, reaching 47.33 €/MWh, before rising again in June 2025 to 67.61 €/MWh.
In regard to power prices for the upcoming quarters of 2025, an upward trend has been observed. As of January, the average price for the second quarter of 2025 was recorded at 53.82 €/MWh, representing an increase from 49.10 €/MWh in December. For the third quarter of 2025, prices surged from 78.41 €/MWh in December to 87.46 €/MWh in January, while the fourth quarter is projected to be similar to the third, with a price of 87.22 €/MWh.
In the long term, the electricity price for Calendar Year 2026 has risen to 67.03 €/MWh in January, an increase from the December value of 62.36 €/MWh. Furthermore, MIBGas contracts for January closed at 47.74 €/MWh for the second quarter of 2025 and 47.70 €/MWh for the third quarter of 2025, reflecting increases from December when Q2 2025 was traded at 43.69 €/MWh.
Gas prices for Calendar Year 2026 have also exhibited an upward trend, increasing from 34.21 €/MWh in December to 38.64 €/MWh in January. Meanwhile, prices for EUA ETS have demonstrated significant growth, with the price for EUADec’26 rising from 71.07 €/t in December to 80.52 €/t in January, and EUADec’27 exhibiting a slightly higher price of 83.19 €/t.
From a regulatory standpoint, a noteworthy development in January was the one-year extension of the pilot regulatory demonstration project. Participants in this project, which consists of large consumers, assist in managing the electrical grid’s stability. In exchange for consuming reactive energy, they receive variable compensation along with exemptions from transmission and distribution charges.
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%
