Around the holiday period, Spain’s electricity market showed a notable dip in prices, while volatility in the Iberian energy system persisted. On the Friday preceding Christmas Eve, the average price registered 21.12 euros per megawatt-hour (MWh) according to OMIE, the Operator of the Iberian Electricity Market. This trough marked a low unseen since May 9, 2021, when average prices were 10.53 euros per MWh and the surge that sparked the broader energy crisis began to unfold.
The decline was linked to renewed rainfall and the resumption of hydroelectric generation amid one of the driest years on record. Wind output also rose, reducing the reliance on gas-fired plants. As a result, renewables contributed roughly 70 percent of total generation on that Friday, with nuclear power providing about 90 percent of its capacity at that moment.
Gas prices were influenced by a price cap of 40 euros per MWh, though coal and simple combined-cycle plants were infrequently scheduled. The framework also covers cogeneration, which receives compensation. Government estimates indicate that without the Iberian exemption mechanism, the price that Friday would have been about 102.07 euros per MWh, a level more in line with other European markets where prices ran higher, such as Germany around 185.9 euros, Italy at 103.6 euros, and France at 171.3 euros per MWh.
Over the pre-Christmas weekend, consumers could expect particularly low prices in the early hours from 1 a.m. to 7 a.m., near 4 euros per MWh, and from noon to 5 p.m., around 10 euros per MWh. Prices were anticipated to stay above 60 euros per MWh from 6 to 10 p.m., reflecting the usual daily swings seen in wholesale energy markets.
Beyond the base energy price, taxes and levies add to the final bill. The total includes a 5 percent value-added tax and a 0.5 percent Special Electricity Tax, alongside tolls and other charges. Historically, these adjustments have varied, and not all customers follow the same tariff. Approximately nine million consumers hold contracts under the Voluntary Price for Small Consumers (PVPC). In the first 20 days of December, PVPC customers paid an average of 174.21 euros per MWh, versus 116 euros per MWh in the same period the prior month.
Market researchers at ASE noted that a colder spell in November and reduced wind power pushed prices higher earlier in the year. As temperatures moderated and wind generation rose in the second week of December, prices fell. ASE suggested that most remaining December days would stay “below 200 euros per MWh.” The year-to-date average hovered around 213.75 euros per MWh, marking a sharp rise from the pre-crisis era when averages floated around 40 to 50 euros per MWh.
renewable record
The trending pattern underscores the growing role of renewable energy in shaping price dynamics and reducing dependence on gas. The operator that oversees Spain’s electricity system and grid forecasted that 2022 would close with wind and solar power delivering a sizeable share of electricity. It projected wind power to exceed 61,000 gigawatt-hours (GWh), modestly higher than 2021, while solar photovoltaic production was expected to be roughly 33 percent higher than the previous year, near 28,000 GWh.
If these forecasts held, photovoltaic capacity would rise to about 10 percent of the energy mix for the first time. This technology has expanded rapidly in recent years. New installed capacity this year had already surpassed hydroelectric power by about 3.4 gigawatts. Additionally, 1.2 gigawatts of wind power were installed, contributing to a total increase of roughly 4.6 gigawatts of new renewable energy capacity.