Historic Drop in Spain’s Wholesale Electricity Market
This May, the Spanish electricity market has experienced an unprecedented moment. During the first half of the month, the daily average price in the wholesale electricity market stood at €14.7/MWh, the lowest level recorded for this time of year since records began. This historic drop is driven by a key factor: solar energy, which has reached production levels never seen before during peak hours, even generating negative prices at certain times.
Negative Electricity Prices Mark a Milestone
Sunday 19 May marked a milestone in the electricity sector: between 2:00 pm and 3:00 pm, the price fell to -€1.07/MWh, and for seven consecutive hours it remained below €5/MWh. This phenomenon is no coincidence but reflects a profound transformation in our electricity system.
Solar Power’s Growing Role in the Energy Mix
Solar power has revolutionized the market. During peak sunlight hours, when the sun shines brightest, solar generation dominates the energy mix. On days with high renewable production and relatively low demand, especially on weekends, oversupply drives prices sharply downwards.
Renewable Energy Displaces Fossil Fuels
Red Eléctrica Española explains that during periods of high system pressure — known as “bottlenecks” — the cheapest technologies, such as solar and wind, are dispatched first, displacing fossil fuel sources. This can cause prices to even turn negative.
Meanwhile, combined-cycle gas generation has fallen by 20% so far this month. These plants serve as backup, only activated when needed to stabilise the system during low renewable output or peak demand. However, the rise in renewables has increased the cost of balancing services necessary to maintain grid stability, raising costs by over 50% for regulated consumers in some cases.
Key Market Data: May 2025
During the early days of May, the average wholesale price stood at €14.7/MWh, a historically low level for this time of year. At specific times, such as Sunday 19 May between 2:00 pm and 3:00 pm, prices turned negative, reaching -€1.07/MWh, and remained below €5/MWh for seven consecutive hours. At the same time, combined-cycle gas generation dropped by 20%, while solar production increased by 31% compared to the same period last year. However, the cost of balancing services — essential for grid stability — rose by more than 50%, impacting regulated consumer bills.
What does all this mean for you as an Energy Nordic customer?
This historic drop is not just a number; it is a tangible sign of a paradigm shift towards a cleaner, more sustainable electricity system. Although wholesale price reductions are not immediately and fully reflected in bills, at Energy Nordic we are committed to passing on the benefits of this transition to our customers.
We offer clear billing and personalised service to help you fully understand what lies behind every cent you pay. Our commitment is to accompany you through this transition, making energy accessible and transparent.
An electricity system in full transformation: challenges and opportunities
Negative prices are an unmistakable sign that the system is changing, but they also remind us of the technical challenges we still need to overcome. Improving energy storage and strengthening connections with neighbouring countries like France and Portugal will be key to ensuring stable and efficient supply.
Meanwhile, occasional reliance on fossil fuels remains necessary to maintain stability, but the future will depend on how we manage solar surpluses, optimize storage, and promote greater European integration.
Energy Nordic will continue to be your trusted partner on this journey towards a cleaner, fairer, and more sustainable energy future.
Source of the news: Europapress
You may find this interesting
- Electricity Price Increases in Spain: Current Causes and How to Avoid Surprises
- How to Manage and Pay Your Electricity Bill Online While Away from Spain
- The Ultimate home energy checklist for expats in Spain: Off-season guide
- Switching to Energy Nordic: A 5-Minute Online Guide (No Paperwork!)
- How to Read Your Spanish Electricity Bill in 60 Seconds (Without a Dictionary)
