Spain | More gas-resilient, but not more competitive

Summary

The energy transition is reducing Europe's exposure to gas. In Spain, the strong expansion of renewables has helped contain wholesale prices, but system costs have prevented this decline from being fully passed on to consumers.

Key points

• Key points:
• Geopolitical tensions are making gas more expensive and highlighting Europe's dependence on a more volatile global LNG market.
• Spain stands out for its high renewable penetration—accounting for 57% of electricity generation in 2025, compared to 42% in Europe—which reduces its exposure to gas.
• The 20-percentage-point increase in renewables within the Spanish energy mix between 2021 and 2024 reduced wholesale prices by nearly 20%, but this decrease has barely been reflected in the final bill.
• A lack of storage, insufficient power grids, and greater balancing needs represent the new bottlenecks limiting the system's competitiveness.
• The challenge is no longer technological, but rather one of design and regulation: adapting the electricity system to an environment dominated by renewables.

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