Storm takes electricity price to negative in Spanish wholesale market


On Monday, 1 April, the price of electricity on the wholesale market was €0 for ten hours and for another three it was negative for the first time in the history of Spain. Specifically, the megawatt hour (MWh) was quoted at €-0.01, according to the Iberian Energy Market Operator (OMIE). However, the reality is that the price of energy on the wholesale market is only one of the factors that contribute to the price of electricity. There are fixed costs for the user in terms of tolls, charges and system adjustments that meant that the megawatt-hour finally cost between €10 and €18 in each of these hours and domestic consumers paid between €55 and €118 for it.

The price drop in the wholesale electricity market is due to the Nelson storm, which has brought rain and strong winds that help renewables to operate at full capacity. Hydroelectric and wind power are two of the cheapest forms of power generation, helping prices to plummet.

April thus continues the downward trend recorded in March, with an average price of €20 per megawatt hour (MWh), half the average price recorded in February and 77.5% less than in March 2023, when it stood at €89.6/MWh. On 10 March, a minimum price of €0.54/MWh was recorded thanks to the high participation of renewable energies due to the storms.

Other European countries have recorded negative prices in the past, something that is relatively frequent in Germany and the Netherlands but is the first time this has happened in Spain.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.