Renewables shield Spain from energy crisis as gas sets electricity price in only 9% of hours

Spain has significantly reduced its reliance on gas for electricity generation, with renewables now setting the marginal price only 9% of the time in early 2026, down from 52% in 2021, shielding households from gas price fluctuations.

A report by Ember highlights that the increasing share of renewable energy, particularly wind and solar, has decoupled Spain’s electricity prices from gas market fluctuations. This shift has resulted in an estimated €10 monthly savings for an average household on regulated tariffs, representing nearly a 19% reduction in electricity bills compared to 2021 levels. The trend is linked to a 37% increase in renewable capacity between 2021 and 2025, supported by regulatory reforms and energy storage deployment.

During recent geopolitical tensions in the Middle East, renewable generation across the Iberian Peninsula remained strong, displacing fossil-fuel plants and mitigating the impact of rising gas prices on wholesale markets. As a result, Spain and Portugal have maintained some of the lowest wholesale electricity prices in the EU, with early 2026 prices averaging around €42/MWh, compared to €143/MWh in Italy. Ember estimates that if Spain’s exposure to gas had remained at 2021 levels, households would pay approximately €10 more per month, emphasizing the cost savings driven by renewables and storage.

Implications of Renewables on Spain’s Energy Security

This development demonstrates how renewable energy expansion enhances energy resilience and reduces vulnerability to global gas market volatility. For consumers, it translates into tangible cost savings and greater price stability. For the broader economy, it supports energy independence and reduces reliance on imported fossil fuels, aligning with Spain’s decarbonization goals and energy security strategies.

Spain’s Renewable Growth and Energy Transition Timeline

Spain’s renewable capacity has grown rapidly over recent years, with wind and solar installations increasing by 37% from 2021 to 2025. This expansion was accelerated by policy reforms and energy storage deployment, especially following the Iberian blackout in April 2025, which prompted regulatory adjustments to improve grid resilience. These measures have facilitated greater integration of storage and renewable capacity into the grid, supporting stability and reducing dependence on gas-fired plants for marginal electricity generation.

Prior to this, gas plants dominated price-setting during periods of high demand, but the current trend shows a marked decline in their role, with renewables taking precedence for system stability and market pricing. The shift is part of Spain’s broader strategy to decouple its economy from imported fossil fuels and enhance its renewable infrastructure.

“The rising share of renewables has significantly reduced the influence of gas on electricity prices, providing cost savings for households and enhancing energy resilience.”

— an anonymous researcher

Uncertainties in Long-Term Renewable and Storage Expansion

It is still unclear whether Spain can sustain its renewable growth at the current pace amid potential permitting delays, grid constraints, and the need for further storage capacity expansion. The impact of ongoing policy reforms and market developments on future prices and system stability remains to be seen.

Future Policy and Infrastructure Developments in Spain

Next steps include accelerating renewable permitting processes, expanding grid infrastructure, and deploying additional storage to maintain resilience and cost savings. Monitoring how these measures influence market prices and energy security will be crucial as Spain aims to further decouple from fossil fuel dependence and meet its climate commitments.

Key Questions

How much has renewable energy reduced electricity prices in Spain?

Renewables have decreased the influence of gas on electricity prices, leading to an estimated €10 monthly saving per household and reducing wholesale prices to around €42/MWh in early 2026.

Will this trend continue in the future?

While current data shows strong growth, future developments depend on permitting, grid expansion, and storage deployment, which are still evolving.

How does Spain’s renewable expansion compare to other EU countries?

Spain has one of the lowest wholesale prices in the EU due to its renewable growth, contrasting with countries like Italy where prices remain higher due to continued reliance on gas.

What role does energy storage play in this transition?

Storage systems have quadrupled in capacity and support grid stability, enabling higher renewable integration and reducing reliance on gas plants for system balancing.

What are the main challenges ahead for Spain’s energy transition?

Key challenges include permitting delays, grid reinforcement, expanding storage capacity, and ensuring continued policy support for renewables and electrification.

Source: PV Magazine