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Spain has invested heavily in wind and solar energy over the past six years and is now one of the countries with the lowest electricity prices in Europe. While the Iran war plunged the global economy into an energy crisis and caused gas prices to rise rapidly, Spain is benefiting from its early investments in renewable energy.
Since 2019, Spain has doubled its wind and solar capacity, adding more than 40 gigawatts. This means that the country has seen greater expansion than any other EU country except Germany, whose electricity market is twice the size of Spain’s.
Renewable energies reduce dependence on gas
As a result, Spanish electricity prices are now less sensitive to fluctuations in gas prices. After the outbreak of the Iran war, gas prices rose by 55 per cent and continued to climb.
The energy think tank Ember reports that the growth of renewable energies in Spain has reduced the influence of fossil fuel power plants on electricity prices by 75% since 2019. There, the number of hours during which electricity prices were based on gas-fired power plants declined more rapidly than in gas-dependent countries such as Italy and Germany.
Effects on electricity prices and imports – and a successful coal phase-out
Spain’s strategy has significantly reduced household electricity bills. Just a few years ago, the country was one of the most expensive electricity providers in Europe. By 2026, it will be one of the cheapest. In addition, Spain has reduced its import bill in the electricity sector more than any other EU country between 2020 and 2024. Spain has reduced its need for gas imports by 26 billion cubic meters by increasing the use of renewable energy. This corresponds to a value of 13.5 billion euros.
The switch to renewable energies has not only stabilised the electricity grid, but it has also meant that the share of Spanish electricity generated by coal has fallen to zero since 2025.
Storage remains a challenge in Spain
Despite its success, Spain still faces challenges, particularly when it comes to storage. The country’s battery storage capacity is 120 megawatts, which ranks it only 13th in Europe.
The growing impact of renewable energies on electricity prices shows that countries that are heavily dependent on fossil fuels are particularly vulnerable to geopolitical crises. Italy and Belgium, for example, are under particular pressure because they are more dependent on gas supplies from Qatar. Especially in times of war or supply bottlenecks, oil and gas prices can fluctuate unpredictably. This situation reinforces the need to switch to green energy.
Renewable energy is cheaper in the long term
Experts such as energy finance expert Gerard Reid and Austrian economist Nikolaus Kowall argue that renewable energies are cheaper than fossil fuels in the long term. Solar panels, wind turbines and batteries only need to be bought once. On the other hand, political crises influence the prices of fossil fuels, necessitating repeated purchases.
A report by the UK Climate Change Committee states that the total cost of achieving climate neutrality by 2050 will not be higher than the cost of a single fossil fuel price shock. However, without climate protection measures, energy prices would rise significantly by 2040.
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