Spain | From gas vulnerability to renewable resilience

Summary

Spain’s renewable-based power model has increased resilience to external energy shocks, especially at the wholesale level, but incomplete grid readiness, limited storage and high non-energy costs constrain how much of that advantage reaches final consumers.

Key points

• Key points:
• Europe is less fossil-intensive than in the past, but it is still exposed to energy shocks because it remains dependent on imported gas.
• Spain stands out because its higher renewable penetration has reduced its dependence on gas more than in most peer markets.
• Gas remains the key marginal driver of electricity prices across Europe, but Spain’s wholesale prices are less sensitive to gas than those of Italy, Germany or France.
• This resilience is only partially reflected in retail electricity prices. Even where retail tariffs are more directly linked to wholesale prices in Spain, non-energy components (balancing services, taxes, charges) limit the pass-through to final consumers.

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