After the ups and downs of 2024, when energy went from being historically cheap to becoming more expensive, the situation should return to normal during 2025.
Original article in Spanish: El Mundo
2024 will be remembered as a year of contrasts in the Spanish energy mix and in the wholesale electricity market. In just 12 months, the electricity system went from offering historically low prices in spring to closing the year at maximums. According to the Iberian Energy Market Operator (OMIE), the average for the first half of the year was 39.12 euros per megawatt hour (MWh), an ultra-competitive level that clashes with the period of the following six months, in which the figure soared to 85 euros per MWh – more than double.
In a global calculation, the year was close to 65 euros per MWh, that is, 25% cheaper than the 87 euros recorded in 2023. However, the last stretch that caused this abrupt jump reflected, according to Antonio Aceituno, general director of the consultancy Tempos Energía, “the two faces of the Spanish energy market”. On one hand are the efficiency and savings offered by renewables and nuclear energy in our country at favourable times. And on the other, the rise in prices caused by the need to resort to more expensive technologies, such as combined cycle gas, when that tandem cannot meet demand.
During the last two months of 2024, various nuclear shutdowns at the Ascó I and II plants reduced their capacity by 26% (equivalent to 8% of generation), while the lack of wind and sun during that period throughout Europe (a phenomenon known as the dunkelflaute) considerably limited renewables contribution. This forced the use of combined cycle gas plants, sending electricity prices soaring above 100 euros per MWh.
Looking ahead to 2025, the consultant predicts that last year’s exceptional scenario, with historically low prices thanks to a mild winter, high wind energy production and forced hydraulic releases at zero cost in some sections “will be difficult to repeat”. To a large extent, because this conjunction of factors, which allowed 1,162 hours below 2 euros per MWh, will be unlikely over the coming months. Thus, he foresees “a spring of competitive prices”, but also a more expensive summer and autumn, which could lead to an annual average of 80 euros per MWh, moving away from the 65 euros of 2024.
Aceituno also highlights the strategic role of the Spanish hydroelectric system, capable of generating energy during the most expensive hours to balance prices. For this reason, he points out that, if intense rains are recorded in the northwest of the country, where the largest hydroelectric capacity is concentrated, “there could be an increase in the supply of renewables”.
Be that as it may, a report by OBS Business School on the energy sector in Spain projects an all-time record of 149 terawatt hours (TWh) of renewable production in 2025. This is a figure equivalent to 56% of the mix, in which wind power will remain the leader, followed by nuclear.
For his part, Alessandro Miori, country manager in Spain for Ener2Crowd, points out that the sustained growth of photovoltaic caused a “more pronounced” impact last year, to which was also added the uncertainty of the wind sector with the paralysis of more than 60 projects in Galicia due to legislative changes. However, he believes that “the implementation of new energy policies and the increase in renewable generation can contribute this year to greater stability in the electricity market”. And he cites as an example the update of the National Integrated Energy and Climate Plan (Pniec), approved last September, which includes the ambitious goal of reaching 81% of electricity generation from green sources by 2030.
In this context, geopolitical ups and downs will also condition the market. The end of the gas transit agreement between Russia and Ukraine in December 2024 aims to strengthen Europe’s dependence on liquefied natural gas (LNG), especially from the United States, which already accounts for 45% of European imports.
Ángel Crespo, CEO of MET Energía España, warns of upside risks in the LNG market, due to “possible delays in capacity additions and higher demand from Asia, driven by economic recovery or cold weather”. In addition, Aceituno points out that Donald Trump's return to the White House could disrupt the market, with possible tensions with China that would redirect LNG ships to Europe, but also with pressure on the EU to increase its purchases of US energy. Similarly, if geopolitical tensions persist, “Europe could see its gas reserves reduced, increasing volatility and complicating the balance between supply and demand,” says Crespo.
In 2024, liquid fuels registered moderate prices, closing the year with an average of 1.53 euros per litre of petrol and 1.45 euros for diesel, below the levels of 2022 and 2023. The beginning of 2025 has shown a slight upward trend, with a stable start to the year, but with prices somewhat higher than the previous close.
In the opinion of Óscar Barrero, partner in charge of Energy at PwC, this relative stability responds more to short-term factors than to structural ones: “The evolution of crude oil remained in a stable range, influenced by the decisions of the Organization of the Petroleum Exporting Countries (OPEC) and the moderate global economic recovery.” However, he points out that the demand for refined products experienced seasonal peaks that raised costs at certain periods, especially towards the end of the year.
For 2025, Barrero forecasts a slight increase in fuel prices. The reasons: a forecast of moderate macroeconomic growth and possible variations in energy policies, such as changes resulting from the new administration in the United States and local fiscal adjustments.