As in other European markets, Spain’s energy transition is beginning to reveal systemic effects that are reshaping the operation and economics of the power sector. While the large-scale integration of renewable energy has been instrumental in decarbonization efforts, it is also creating imbalances that challenge traditional price formation mechanisms and remuneration models.
In 2024, market conditions were already conducive to the emergence of negative electricity prices. This scenario materialized on June 16th, with prices reaching -2 €/MWh for six consecutive hours, and reoccurred on June 23rd. More recently, on March 30th, 2025, the market recorded a new low of -5.21 €/MWh at 15:00. These events are not isolated anomalies; they reflect a structural trend linked to oversupply during specific time blocks—particularly in solar-dominated hours.
Historically, certain protectionist mechanisms have offered partial buffering, especially for large incumbent players. However, their ability to mitigate systemic stress appears limited in the face of an increasingly non-dispatchable generation mix.
In this environment, battery storage has gained momentum as a potential corrective measure. Yet, questions remain as to whether such technologies address the root causes or simply defer systemic imbalances. Could the core issue lie not on the supply side, but in an underdeveloped industrial demand base?
Within this context, short-term forecasting accuracy becomes increasingly relevant. High renewable variability, combined with demand uncertainty, amplifies the consequences of forecast errors—impacting intraday market performance, system balancing, and curtailment risks. Improving forecast precision is therefore not just a technical challenge, but a strategic component of ensuring economic and operational stability.
This evolving scenario invites a deeper discussion on the structural conditions required to ensure both the economic viability and operational resilience of Spain’s future power system.
