Grupo ASE: Renewables beat the record, with 61.7% of the mix and lowering the price of electricity to 40 €/MWh. Wind has covered 32.2% of the mix, hydro 15.4% and photovoltaic 11.6%, while gas and coal only account for 8.1%. Spanish electricity futures are 15-25% lower than those of the German market, the European benchmark.
The daily wholesale market price (POOL) for February was 40.00 €/MWh. This is 46% lower than in January and 69.7% lower than a year ago (132.06 €/MWh). According to ASE Group analysts, this drop is explained by the wind power generation registered in the last week of February.
Electricity was at very moderate levels, thanks to the low price of gas, but it was during the last week of February that prices plunged, due to the extraordinary increase in wind power generation. From 22 to 29 February, the average price in Spain fell to just 6.13 €/MWh and brought the final price for the month of February down to 40 €/MWh.
Given the peninsula’s limited capacity to export its surplus renewable generation, the Iberian electricity price was 41% below the main European markets.
Electricity demand continues its downward trend and in February contracted by 2% compared to the same period last year. Moreover, according to the analysts at Grupo ASE, if we compare the figure with the average for the last five years, the reduction reaches 6.5% and in January it already registered a 5.8% drop.
The mild temperatures, lower industrial demand and the increase in self-consumption explain the strong downward trend that has taken demand to levels of 20 years ago.
Electricity prices in Spain are back to pre-crisis ranges, between 50-60 €/MWh for the 2024-2025 curve. Even in the short term, the Q2-24 price has broken €40/MWh downwards. The discount premium on the German futures market, the European benchmark, is 10 €/MWh for 2024 and more than 20 €/MWh for 2025.
This sharp reduction is driven by the fall in the prices of the main commodities (gas, coal and CO2), together with expectations of a strong increase in renewable generation and weak electricity demand.
