Industry Shifts and Energy Use in Spain
Spain cut its gas consumption by 11 percent on average over the last five years, from August 1, 2022 to March 31, 2023, totaling as much as 232,430 gigawatt-hours according to data published by Enagás. This pace is below the 15 percent voluntary savings target agreed by the 27 European Union member states this summer. Yet the reduction helped end a winter without mandatory consumption restrictions, while gas prices remained relatively stable, hovering around 40 euros per megawatt-hour in the market environment.
The Ministry for Ecological Transition acknowledged the fall in gas use while preparing for electricity demand growth driven by neighboring France and Portugal. Through February, the cumulative demand drop reached 19 percent. If the trend continues through the period, the nation is on track to meet the voluntary target. The agreement relies on member states’ best efforts and signals an alert state only if the target becomes a binding obligation; if that occurs, Spain’s target would fall between six and seven percent.
Enagás reported that gas-fired generation, primarily from combined-cycle plants, rose by 42 percent compared with the previous five-year average, totaling 86,170 GWh. The rise reflected solidarity with neighboring countries and drought constraints that favored renewables. In January, gas use to generate electricity increased to about 20 percent, despite high foreign sales. Across the eight months analyzed, hydroelectric assets accounted for 16.2 percent, while combined cycles accounted for 11.4 percent.
Industry Efficiency
Much of the consumption decline has focused on the traditional demand cluster of households, businesses, and above all industry. Gas demand among industry fell by 27 percent, reaching a total of 146,258 GWh. Government incentives for small-scale consumers, embedded in the contingency plan approved in October, encouraged savings. Debates swirled around measures to curb energy use, including guiding workplaces and public buildings to adjust temperatures and switch off lights after 10 PM. Some proposals, such as a bill to shield consumers from higher bills, remained contested, while others aimed at structural reforms like simplifying the PVPC regulated tariff, expected to be implemented by 2024.
Industry, the largest gas consumer, gradually shifted to more efficient fuels to curb consumption. A spokesperson for the Association of Petroleum Operators notes that these efforts contributed to lower demand and forced some production pauses in energy-intensive sectors due to price pressures. Market observers report declines of up to 35 percent year over year, with February showing about 17 percent and hopes that March would continue the trend, according to the president of the Gas Industrial employers’ association.
Toward Next Winter
Spain is pursuing four European pillars to brace for possible supply disruptions this winter. The strategy emphasizes diversifying imports, expanding renewable capacity, and storing energy for peak periods. Currently, Spain imports about 90 percent of its gas from six countries, with Russia remaining a supplier for some volumes. In renewables, roughly 5,000 new megawatts have been added since April 2022, bringing total capacity to about 71,052 MW. Storage targets aim to end winter with a comfortable buffer, estimated around 81.4 percent of full capacity.
In the weeks ahead, European nations reaffirmed their intent to maintain these safeguards as the continent braces for a potentially challenging winter. The Energy Commissioner Kadri Simson recently underscored the need to stay prepared. If Spain were to seek an exception to reduce consumption to seven percent and refinery fuel substitutions occur, gas exports could be adjusted and still be manageable, according to industry executives. This outlook depends on how quickly demand normalizes and how energy markets respond to policy measures across member states.