Spain, Beacon of Energy Stability in the Middle of a Geopolitical Storm!

Spain, Lighthouse of Energy Stability in the Middle of a Geopolitical Storm!

Renewables act as a shield against the escalation of gas and European volatility.

The global energy dashboard is shaking virulently. The escalation of conflict in the middle east has set off alarm bells in Europe, causing a domino effect that is already being felt in the pockets of millions of citizens. The strategic closure of Strait of Hormuz and the growing tension derived from the war in iran have skyrocketed the price of gas, directly impacting the cost of electricity in much of the continent. Countries like Germany or Italyindustrial and economic references, observe with concern how their energy bills experience drastic increases in a matter of days, a trend that threatens to hinder their economic recovery.

However, the behavior of the energy market is not uniform. While uncertainty marks the pace in other latitudes, Spain It stands as an oasis of relative calm. Despite the volatility inherent in international markets, the impact in our country has been noticeably more moderate. The key to this resilience lies in the determined commitment and the growing weight of renewable energies. According to the latest data from the Spanish Electrical Networkthese clean sources already exceed the 60% of electricity generation national, functioning as a true buffer against fluctuations in the price of gas.

This difference is palpably manifested in the hourly pricing structure. While in other countries there are peaks in high energy costs, in Spain there are moments, especially between mid-morning and afternoon, in which the Electricity cost may plummet to zero. This reality translates into forceful figures: it is paying almost three times less than in nations like Germany, Italy or Ireland, where prices are at 113, 141 and 151 euros per megawatt hourrespectively. A situation that, just a few years ago, would have seemed like a chimera, but that today is a palpable reality thanks to the energy transition.

The Spanish energy sector has begun to reveal the keys to this dynamic. In recent statements to laSextahe director of Próxima Energía, Jorge Morales de Labrahas offered an expert perspective on this phenomenon and the crucial role that renewable energy plays in the stability of the national electrical system. Their analysis sheds light on the complexities of the market and the strategies that allow Spain to navigate these turbulent waters.

Morales de Labra explains that, sometimes, the cost of stopping a generation plant is higher than that of keeping it operational. “Sometimes it is more expensive to stop the plant. That's why some plants even make offers in the market at a negative price. As if electricity were free. “They are even willing to pay in order not to stop production,” explains the specialist. This behavior, which may seem counterintuitive, responds to the economic logic of optimizing resources and avoiding greater losses associated with plant shutdowns and startups.

This peculiar scenario of negative prices is intrinsically linked to the rise of solar energy at this time of year. The energy expert emphasizes that spring is being particularly generous in terms of solar production. “We have had a very good season. April and May are usually months with an extraordinary solar contribution and where there is still not much consumption because we do not turn on the air conditioning,” says Morales de Labra. The combination of high solar radiation and still contained demand creates the perfect conditions for supply to exceed demand, pushing prices down, and even into negative territory.

Thus, while a significant part of Europe grapples with an intensifying energy crisis, Spain benefits from a unique window of opportunity. Daylight hours become synonymous with electricity that is not only cheaper, but sometimes free, thanks to the undisputed prominence of renewable energies. This trend, far from being a mirage, is consolidated as a fundamental pillar of the country's energy security and competitiveness.

Frequently Asked Questions

Why does the closure of the Strait of Hormuz affect the price of electricity in Europe?
The Strait of Hormuz is a vital shipping route for the transportation of oil and natural gas. Its closure or restriction of passage increases transportation costs and uncertainty, which translates into an increase in the price of gas, and therefore, electricity in Europe.

What role do renewable energies play in price stability in Spain?
Renewable energies, such as solar and wind, have very low marginal production costs once built. Its growing participation in the Spanish energy mix acts as a buffer, reducing dependence on gas and moderating price increases when it becomes more expensive.

Is it normal for the price of electricity to drop to zero or be negative?
Yes, it is possible and increasingly common in Spain, especially during hours of high solar and wind production, and when demand is low. Some plants even pay to pour energy into the grid to avoid shutdown costs.

How much more expensive is electricity in Germany or Italy compared to Spain?
At certain times, electricity in countries such as Germany, Italy or Ireland can be almost three times more expensive than in Spain, with prices exceeding 100 euros per megawatt hour, while in Spain prices close to zero can be reached.

Why is spring a favorable period for renewables in Spain?
Spring, especially April and May, is characterized by high solar radiation and still moderate energy consumption (before the peak air conditioning season), which maximizes solar and wind energy production and puts downward pressure on prices.

What percentage of electricity generation in Spain comes from renewables?
Renewable energies already exceed the 60% of electricity generation in Spain, according to data from the Spanish Electric Network.

Does the war in Iran directly influence the price of electricity in Europe?
Yes, geopolitical instability in the Middle East, especially in oil and gas producing areas such as Iran, generates uncertainty in global energy markets, affecting gas prices and, consequently, electricity prices in Europe.

What does it mean when a plant makes offers at a negative price?
It means that the plant is willing to pay to inject energy into the electrical grid. This occurs when production is very high and demand is very low, and stopping the plant would imply higher stop-and-start costs than the small amount that would be paid for adding energy.

Is the current situation in the Middle East the only cause of the rise in gas?
While the conflict in the Middle East is an important and recent trigger, the price of gas was already experiencing volatility due to other factors, such as the recovery in post-pandemic demand and the availability of supplies.

Is this trend of low prices in Spain expected to continue?
The trend of low prices in Spain, especially during times of high renewable production, is expected to continue and consolidate as the penetration of clean energy increases. However, the global volatility of the energy market can always generate fluctuations.

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