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
May 2025
Key figures of the month
In May 2025, electricity prices in European markets continued to show significant variations, influenced by the uneven distribution of renewable energy and differing demand patterns across countries. Although average spot prices decreased compared to April, two distinct groups emerged: on one hand, Spain (16.97 €/MWh) and France (19.38 €/MWh) had prices below 20 €/MWh; on the other hand, Germany (67.34 €/MWh) and Italy (96.70 €/MWh) experienced prices that were three to five times higher. This discrepancy was primarily due to the greater share of renewable energy in the Spanish and French energy systems.
In the first week of May, electricity prices experienced a decline across the majority of European markets. This decrease can be attributed to reduced electricity demand, falling gas prices, and an increase in renewable energy generation. Notably, TTF gas futures reached their lowest closing value since July 2024.
During the second week, prices rose in most markets, except for Spain and France, where robust renewable generation contributed to price stability. The increase in prices was driven by rising demand, escalating gas and CO₂ prices, and diminished renewable output. Concurrently, Brent oil futures fell to their lowest level since February 2021.
In the third week, both gas and CO₂ prices continued to rise; however, stronger renewable energy generation and lowered demand mitigated price increases, resulting in price reductions in certain markets. This week also marked a significant achievement, as Germany and Italy set daily solar photovoltaic generation records for the month of May.
In the final week of May, there was another decline in prices across most markets. However, Spain, France, and Italy recorded price increases due to heightened demand and lower wind generation. Notably, on May 30, both France and Italy established new records for solar photovoltaic generation, achieving 143 GWh and 156 GWh, respectively. Demand trends were mixed, as holidays and elevated temperatures diminished demand in Northern Europe while simultaneously increasing it in Southern Europe.
The gas market displayed a mixed trend in May: prices fell in the first and last weeks of the month but rose during the middle. Overall, the monthly average remained close to levels seen in April. However, gas prices for Cal’26 experienced a more significant increase.
CO₂ prices (EUA for December 2025) rose notably, climbing from 65.5 €/t in April to 71.15 €/t in May. In contrast, the CIF ARA Y+1 coal price dropped slightly to 105 €/t. Overall, May showed signs of moderate recovery in energy markets, with rising prices for electricity, gas, and CO₂, while coal prices saw a slight decline.
Energy demand and generation mix
In May 2025, electricity demand in Spain reached 19,300 GWh, while total generation was 20,048 GWh. Both figures were lower than those of May 2024, but higher than in April 2025. The increase compared to April was mainly due to the blackout that affected Spain during that month.
Renewable energy sources led electricity generation in Spain in May 2025, accounting for 61.5% of the total mix. The top three technologies were all renewable: solar PV ranked first with 23.4%, followed by hydropower at 17.4%, and wind at 16.9%. While the same three technologies topped the chart in April, their order has shifted, solar PV has taken the lead, displacing wind to third place, and hydro has moved up to second. Unlike in April, generation shares are no longer evenly distributed, with solar clearly dominating.
Another key point is that combined cycle, at 15.6%, has overtaken nuclear (14.6%) as the leading non-renewable source. This aligns with a significant increase in CCGT generation compared to the previous month, driven by their critical role in system balancing services to ensure power quality. Throughout May, CCGTs maintained a consistent output above 3 GW, playing a central role following the blackout. The rotational inertia provided by these plants helps the grid to absorb disturbances, including frequency deviations, contributing to system stability despite their higher operational costs.
Source: Haya Energy Solutions
Energy prices & market panorama
Source: Haya Energy Solutions
The average electricity price in Spain for May 2025 dropped to €16.97 per MWh, representing a significant decrease of 37% compared to April 2025, which was €26.81 per MWh. This marks the lowest monthly average recorded so far this year, largely attributed to exceptionally high renewable energy output, particularly from solar, hydro, and wind sources.
When comparing it to May 2024, which saw an average price of €30.40 per MWh, this year’s price reflects a nearly 50% reduction. However, it still remains slightly above the historical minimum of €13.67 per MWh, recorded in April 2024.
A notable point is the pricing trend for solar photovoltaic generation. Although solar PV has become the leading technology in terms of contribution to the energy mix, it often experienced prices close to zero or even negative. In such instances, producers had to pay to inject electricity into the grid, especially during midday hours when solar irradiance peaks. These negative price signals have become more structurally ingrained in the market. Hourly analysis shows that on 22 out of 31 days in May, the average daily price remained below 20 €/MWh, and in 8 of those days, prices didn’t even exceed 10 €/MWh. The lowest daily average was recorded on Sunday, May 11, at just 2.21 €/MWh.
Spain has now surpassed 70 consecutive days in which the market has registered zero or negative prices during at least one hour of the day. In May, the system reached its lowest prices on record: -15 €/MWh, occurring multiple times—such as May 11 at 17:00, May 18 at 15:00, and May 25 at 14:00 and 15:00.
Source: Haya Energy Solutions
The average gas price in the MIBGAS market reached 34.10 €/MWh in May 2025, marking a slight increase from Apr’25 (33.51 €/MWh) and interrupting the downward trend seen the previous month. This rise was driven by maintenance outages at several Norwegian gas fields, including an unplanned partial shutdown at the Troll field, which temporarily reduced supply and pushed prices higher.
Market trends and futures
Source: Haya Energy Solutions
From Apr’25 to May’25, energy markets experienced a notable upward trend across most products.
In terms of power prices, only short-term products such as M+1 showed significant declines, falling by 16%. Quarterly products remained relatively stable or experienced slight decreases. Meanwhile, the yearly contracts for Y+1 and Y+2 recorded a modest increase, indicating expectations of a more stable or potentially recovering long-term market.
As previously mentioned, gas prices rose across all timeframes. Monthly and quarterly contracts showed only slight and less significant increases, while yearly products experienced more substantial rises. This trend suggests short-term stability but a noticeable upward shift in long-term price expectations.
CO2 prices also followed this upward trend, with EUA prices for both 2025 and 2026 increasing almost 9%.
Due to rising input costs, the Clean Spark Spread (CSS) has become even more negative, particularly for the Q+2 product. This suggests a deteriorating outlook for combined cycle gas turbines compared to the previous month when only considering energy market revenues. As a result, these plants are increasingly relying on ancillary services and alternative revenue mechanisms to remain economically viable.
In May, Brent crude futures declined, driven by new production increases announced by OPEC+ and ongoing concerns about global demand. OPEC+ confirmed a production increase of 411,000 barrels per day for July, which means a total restored supply of 1.37 million barrels per day over four months, more than half of the 2.2 million bpd cut made during the COVID-19 pandemic. This quicker-than-expected recovery surprised the market, as the initial plan called for a slower pace with monthly increases of 137,000 bpd.
Additional downward pressure on prices was due to trade tensions between the U.S. and China, as well as the potential return of Iranian oil exports pending a possible nuclear agreement. Both factors contributed to expectations of short-term oversupply.
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%
