Spain's electricity mix experienced an unprecedented shift in February 2024, with renewables reaching a record 61.7% share. Here's a breakdown of the key figures:
- Renewable Dominance: Wind power led the charge at 32.2%, followed by hydropower (15.4%) and photovoltaic solar (11.6%). Conversely, gas and coal combined accounted for a mere 8.1% of generation.
- Price Impact: The surge in renewables directly translated to a 46% drop in the wholesale market price (POOL) compared to January, reaching 40.00 €/MWh. This represents a 69.7% reduction from the same period in 2023 (132.06 €/MWh).
- European Comparison: Limited export capacity contributed to a 41% price advantage for Spain compared to other major European electricity markets. Spanish electricity futures trade 15-25% lower than the German benchmark.
- Demand Trends: Electricity demand continued to decline, registering a 2% year-on-year drop in February. Compared to the five-year average, the decrease reaches 6.5%, fueled by mild temperatures, reduced industrial activity, and growing self-consumption.
Outlook and Implications:
- Pre-crisis Pricing: Spain's electricity prices are returning to pre-energy crisis levels, with the 2024-2025 curve settling into the 50-60 €/MWh range.
- Market Disruptor: The sharp cost reductions highlight the disruptive potential of renewables, driven by declining commodity prices for gas, coal, and CO2, as well as expectations for continued renewable growth.
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