Spain's average wholesale electricity price dropped to €44/MWh in early 2026, far below Italy (€127), Germany (€96), and the UK (€103). The key driver: wind and solar now supply 44% of generation while fossil fuels have fallen to 17%, meaning gas sets the marginal price in only 9% of hours compared to 55% in 2022. The structural crossover happened in 2022 when wind plus solar first exceeded all fossil generation combined. Important caveats include that retail prices remain above the EU average due to taxes and levies, system balancing costs are rising, and upcoming nuclear retirements (2027–2035) could push gas back up the merit order. The April 2025 Iberian blackout, initially blamed on renewables, was actually caused by voltage stability issues unrelated to the renewable share, per the final ENTSO-E investigation.
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