Electricity prices in Spain drop thanks to storms but remain 151% more expensive than a year ago

Consumers have seen a 53 per cent reduction in bills in March compared to the average cost in February, despite the drop in photovoltaic production

Cristina Cándido

Madrid

Thursday, 27 March 2025, 17:55

Jana, Konrad, Laurence and Martinho. The succession of storms that has hit Spain in recent weeks, with a particularly high level of rain and cloud cover, has led to a rollercoaster in electricity prices in March. The first half of the month was marked by the absence of wind and especially sun - photovoltaic renewable energy production in March has produced almost three points less than in the previous month - and more expensive gas, at around 42 euros per megawatt hour (euros/MWh).

With this cocktail of meteorological circumstances, the turning point came on 13 March when the average price of electricity stood at 111.73 euros/MWh. And from the 14 March, still with heavy rains but more wind, the price has been normalising to an average of 51.1 euros/MWh until 26 March: a decrease of 53.7 per cent.

This has brought low and even negative prices during the middle of the day, as was the case on Wednesday 26 March, although these intervals are not really free for the consumer as fixed costs for tolls, charges and system adjustments are added to the final bill.

With five days to go until the end of the rainiest March since 1961 and with Spanish reservoirs at 70 per cent of their capacity, the final stretch of the first quarter is bringing relief in electricity bills, especially when compared to the average prices seen in the first two months of 2025, which reached 96.69 euros/MWh in January and 108.31 euros/MWh in February.

"This year's prices are much higher than those of 2024 because there was no winter in Europe last year. The consequence was that the price of gas - which is what sets the price of electricity in Spain - was around 26 or 27 euros/MWh. This year there has been what in German is called a 'dunkelflaute', little wind and little sun," explained Antonio Aceituno, general manager of Tempos Energía.

However, this optimism is tempered by the fact that the price of electricity in March remains, despite the fall, 155 per cent higher than the 20.28 euros/MWh of the same period last year.

Temporary relief

Is this downward trend set to continue? "It seems that the push from hydro and solar is going to continue to be important during the last week of March and the first part of April, and we will continue to see quite low prices, around 50 euros on average," pointed out Juan Antonio Martínez, energy market analyst at Grupo ASE.

However, according to Martínez it is likely that from the end of May or June prices will be higher than this time last year, once hydro output falls - in the first three months of 2025 it has remained the third largest source of generation behind wind and nuclear - and if gas prices continue on the current upward path. "It is possible that once this maelstrom of hydro and wind generation has passed, gas prices will once again prevail," concluded Martínez.

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