Spain defends this approach before the European Commission, arguing that price interference in nuclear energy and hydraulic sectors could help consumers see lower electricity bills. This position is laid out in the electricity market reform proposal submitted by the Spanish government to Brussels on Tuesday, a document that El Perif3dico de Catalunya of the Prensa Ibe9rica group has reviewed. The assertion challenges Teresa Ribera, the third vice president and Minister of Ecological Transition, who noted that the Spanish strategy is unlikely to produce an immediate and sizable drop in prices.
In an accompanying informal briefing, the administration contends that the current market structure prevents wholesalers from reflecting the true average cost across all technologies. In other words, the price reflects the most expensive technology in use, and the so-called rent to producers is excessive when higher-cost technologies, such as natural gas, dominate the mix. The government argues that these market failures will perpetuate a price crisis rather than resolve it.
Futures market indicators point to a continued rise in electricity prices, with costs staying above the average across technologies for several years. The document cites examples from Germany, noting price levels that rose to 364 euros per megawatt-hour (MWh) in 2023, declined to 256 euros in 2024, and dropped further to 177 euros in 2025. It warns that these elevated levels could amplify inflationary pressures, undermine industrial competitiveness, burden households, and hinder electrification efforts. The author questions whether investments in electric cars or heat pumps will attract capital if prices could hit €400 per MWh in a single year.
Against this backdrop, Spain proposes a reform that keeps the market structure aimed at marginal pricing but introduces fixed-price, regulated contracts for renewable energy, nuclear power, and hydropower. The proposal suggests that such contracts could be signed with these producers under a European legal framework, allowing the government to secure regulated prices and thereby rapidly lower consumer costs while providing price certainty for manufacturers.
The plan has reportedly generated considerable interest among European partners, according to Teresa Ribera, who spoke during the Spain Investors Day and framed the government’s stance as a simplification and acceleration of reform implementation. The emphasis is on reducing regulatory friction and speeding up access to workable pricing mechanisms across the daily market.
Yet enthusiasm within the Spanish electricity sector has been more cautious. Industry groups and employers, such as those represented by the major electricity companies, argue that the government did not engage sufficiently in designing a new market structure. They warn that some countries are already convening expert groups and public consultations, and they fear the reform could undermine the free operation of the electricity market. The sector believes that any move must support a broad transition while maintaining regulatory predictability for investment decisions, especially for large players like Iberdrola, Endesa, and EDP, which collectively hold a substantial share of the market and have long-term plans for expansion.
The industry contends that these groups own a large portion of the energy supply and that wholesale prices do not always reflect the actual costs faced by producers. They also argue that the Spanish electricity sector has historically signed some of the most favorable power purchase agreements in Europe. At the same time, the government points to futures markets that indicate long-term price protections have not shown meaningful improvement over the past two decades, casting doubt on the effectiveness of current mechanisms and reinforcing the push for reform. The core argument remains: a more stable, regulated pricing path could better shield consumers and support a rapid energy transition, even if it involves a partial departure from a fully liberalized market.