Spanish electricity customers have scarcely felt the squeeze from Europe's latest gas-price spike, according to an analysis by the energy think tank Ember. European gas prices have jumped around 75 percent since the outbreak of war between the United States, Israel and Iran, and were still roughly 60 percent above pre-war levels at the start of June 2026, yet on the Iberian power market the shock has barely registered. In each of the first four months of 2026, Spain and Portugal ranked among the EU's three cheapest countries for day-ahead electricity.
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By comparison, in heavily gas-dependent Italy the average electricity price in March stood at 143 euros per megawatt-hour, three times the Spanish level of 42 euros per megawatt-hour. The gap is also visible on the forward markets. Year-ahead power prices in Italy rose by around 25 percent at the start of the war, while in Spain they remained largely stable.
Influence of gas on prices cut sharply
Ember attributes this to the decoupling of gas and power prices. In 2021, gas set the Spanish electricity price in an estimated 52 percent of hours; by the first five months of 2026, that figure had fallen to just nine percent. According to Ember, the main driver is the expansion of wind and solar generation, which grew by 37 percent between 2021 and 2025.
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For a typical Spanish household on the regulated tariff (2.0TD, consumption below 15 kW), this translates into real relief. Ember calculates that if electricity prices were still as tightly coupled to gas as in 2021, monthly bills since March 2026 would be €10, or 19 percent, higher. Savings of around €15 in wholesale costs are offset by roughly €6 in higher grid-balancing costs, leaving a net post-tax saving of €10.
Renewables build-out continues post-blackout
Following the Iberian blackout of 28 April 2025, the Spanish government reaffirmed its renewables strategy and adopted further reforms. Between May 2025 and February 2026, an average of 1.3 GW of new wind and solar capacity was added each month, compared with 1.2 GW per month in the twelve months before the blackout.
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Storage deployment has also picked up pace. Installed capacity of large-scale battery systems quadrupled in 2025, albeit from a low base, and Ember expects another fourfold increase in 2026. In November 2025, the Spanish government adopted a package of measures that, among other things, simplifies the planning process for batteries co-located with existing renewables sites. In addition, since the blackout, renewables plants have also been required to provide dynamic voltage control, a task previously reserved for conventional power stations. By May 2026, six GW of renewable capacity was already delivering this grid service.
Tax cuts to accelerate electrification
The Spanish government has also temporarily reduced electricity taxes. VAT on electricity was cut from 21 to ten percent, and the special electricity tax from 5.1 to 0.5 percent. These two measures alone reduced the monthly bill of a typical household by €18. The tax cuts expired on 1 June 2026.
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Chris Rosslowe, Senior Energy Analyst Europe at Ember and author of the analysis, sees Spain's approach as a model for other European countries. According to Ember, the electrification of transport and industry is the next major lever for shielding the Spanish economy from future price shocks. Despite the progress in the power sector, Spain's import dependence on fossil fuels remains at 71 percent, above the EU average of 57 percent. (nhp)
