NEW ANALYSIS | Spain is successfully decoupling electricity prices from gas power costs
Spain reduced the number of hours where electricity prices exceed gas costs by 75% since 2019.
As a result, Spain's electricity prices were 32% lower than the EU average in H1-2025.
Source: leapinleopard
1 Comment
So I looked into this as I was wondering why UK, which has more renewables than Spain, has much higher electricity prices.
It seems Spain cancelled a large number of CFD contracts and expensive feed in tariffs in 2013 or some which, saving them more than $20 billion, so they are not having to pay the investment costs and are just reaping the benefits of cheap power.
https://www.pinsentmasons.com/out-law/news/spanish-government-suspends-renewable-energy-incentives-temporarily-to-tackle-funding-deficit
https://www.sciencedirect.com/science/article/pii/S0957178722001400
This was at the expense of companies and individuals who built the infrastructure expecting a state-guaranteed reliable payback. There is still litigation going on around this, with Spain mostly on the losing side.
This is very similar to declaring bankruptcy to get rid of debts, but most countries would not do that to their credit rating.
UK has to wait till 2027 for the oldest and most expensive CFD contracts to expire before reaping the benefits of cheap renewable electricity generation.