Spanish Power Prices Plummet: Renewables Reach Record High

Mar 1, 2024 05:53 PM ET
  • Record low electricity prices in Spain as wind and solar power surge, but could impact long-term investment in renewables. Energy crisis leads to exports to France at a fraction of the cost.

Electricity prices in Spain have dropped to near zero as wind and solar power generation reach record levels. Day-ahead prices have been below €10 per megawatt-hour for the past week, with solar production hitting a high on Wednesday. This surge in renewable energy output is expected to continue into March, according to Bloomberg.

While the low prices benefit consumers in the short term, they could deter investment in additional renewable capacity in the long run. The energy crisis in Europe has led to a general decrease in power and gas prices, impacting utility earnings. Spain's Endesa SA reported a significant drop in profit for 2023 due to the normalization of prices.

As a result of the price differential, Spain is currently exporting electricity to France, one of Europe's largest exporters. Prices in Spain settled at €2.14 per megawatt-hour, compared to €67.21 in France. The situation highlights the challenges and opportunities presented by the increasing share of renewable energy in the power mix.

How are record levels of wind and solar power impacting electricity prices in Spain?

  • Record levels of wind and solar power in Spain have led to electricity prices dropping to near zero.
  • Day-ahead prices have been below €10 per megawatt-hour for the past week.
  • Solar production hit a high on Wednesday, contributing to the surge in renewable energy output.
  • The low electricity prices benefit consumers in the short term but could deter investment in additional renewable capacity in the long run.
  • The energy crisis in Europe has led to a general decrease in power and gas prices, impacting utility earnings.
  • Spain's Endesa SA reported a significant drop in profit for 2023 due to the normalization of prices.
  • Spain is currently exporting electricity to France due to the price differential, with prices in Spain at €2.14 per megawatt-hour compared to €67.21 in France.
  • The situation highlights the challenges and opportunities presented by the increasing share of renewable energy in the power mix.
Source:
bloomberg.com

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