The operator behind Spain’s electricity market, OMIE, aligns with the approach proposed by Germany and seven other countries. The market reform focuses on introducing targeted measures to lift current performance while resisting any broad government intervention as recommended by Spain. OMIE supports expanding the role of the futures markets, where electricity can be traded for delivery in days, months, or years, and calls for deeper integration of the European internal market by elevating interconnections. This also means making demand more flexible to accommodate new formats, such as energy storage, which can help balance supply and demand more efficiently. [Source: European energy officials panel, Madrid conference on wind energy and markets]
At a recent wind energy conference in Madrid organized by the wind energy employers’ association, it was explained that the market can be improved without dismantling it. The message was clear: there is no reason to “kill the messenger” by blaming market signals for high prices. High prices reveal structural issues that deserve careful attention, rather than a rush to punitive measures. The discussion framed the European electricity market as functional, with price signals guiding investment decisions, while underscoring the need to strengthen futures trading and market regulation. [Source: AEE conference notes]
Officials noted that futures markets, which could cushion volatility, are currently underutilized. They have faced a long period of decline in Spain, dipping by more than 50 percent over two years, bringing them close to the edge of viability. The proposed remedy is not to force utilities into fixed-price government auctions but to reform the rules that govern these auctions and separate them from unrelated financial regulations. The core issue lies in how warranties, margins, and the regulatory framework interact, and these elements should be examined and updated to restore confidence and functionality. [Source: market regulation roundtable]
Endesa remains the largest electricity company in terms of customer numbers. Its regulatory, wholesale, and gas oversight acknowledged that the central problem is market immaturity. The current approach has been a mostly stable long-term plan, but it falls short when reality exceeds expectations. The industry needs a long-run strategy to meet price realities without unnecessary meddling in market mechanisms. The emphasis is on enhancing market reliability and reducing abrupt interference, while Iberdrola’s leadership signaled support for the German plan, which includes voluntary auctions and a stance against retrospective changes. [Source: executive panel remarks]
reform before 2024
Teresa Ribera, the third vice president and minister for Ecological Transition, expressed hope for a market reform before 2024. The energy forum highlighted the uncertainty of whether changes could be formalized in the European Union journal during Spain’s presidency. With elections approaching in May 2024, it was noted that calendar-bound decisions might be made more efficiently, and delaying them could create confusion about the signals and commitments that Europe expects. The takeaway was that timely decisions, rather than protracted debates, would help bring clarity and stability to energy policy across the EU. [Source: Madrid energy forum briefing]