On Sunday, April 26, 2026, Spanish wholesale electricity prices dropped to near-zero for nine consecutive hours amid a surge in renewable generation, with peak prices capped at €95/MWh, according to data from the Iberian Electricity Market (OMIE). This sharp intraday volatility reflects structural shifts in Europe’s energy landscape, where oversupply from wind and solar is compressing midday margins although evening ramps strain grid flexibility, directly impacting the earnings profiles of integrated utilities and independent power producers across the Iberian Peninsula.
The Bottom Line
Nine hours of near-zero pricing on April 26, 2026, reduced day-ahead revenue for thermal generators by an estimated 18–22% compared to the same period in 2025, based on OMIE settlement data.
Spain Iberdrola Endesa
Peak prices of €95/MWh during evening hours imply continued reliance on gas-fired peakers, keeping forward spark spreads tight for utilities like Iberdrola (IBE.MC) and Endesa (ELE.MC).
The persistent duck curve effect is accelerating investment in battery storage, with Spain’s pipeline of utility-scale BESS projects exceeding 15 GW as of Q1 2026, per Red Eléctrica de España (REE) interconnection requests.
How Renewable Oversupply Is Rewriting Utility Economics in Spain
The phenomenon of midday electricity prices collapsing to near-zero is no longer an anomaly but a recurring feature of Spain’s power market, driven by installed solar capacity surpassing 28 GW and wind exceeding 30 GW as of March 2026, according to REE’s monthly generation report. On April 26, 2026, solar generation peaked at 14.2 GW between 10:00 and 19:00 CET, displacing combined cycle gas turbine (CCGT) output and suppressing pool prices from 11:00 to 20:00, with nine consecutive intervals registering below €1/MWh. This dynamic is eroding the traditional baseload advantage of nuclear and coal, forcing operators to adapt or retire assets.
Meanwhile, the evening ramp—when solar output declines and demand remains elevated—triggered price spikes to €95/MWh between 20:00 and 23:00, reflecting the system’s dependence on flexible gas generation. According to Enagás, gas consumption for power generation rose 11% year-on-year in the first quarter of 2026, underscoring the persistence of fossil fuel backup despite renewable growth. This price dichotomy is compressing operating margins for vertically integrated utilities that rely on wholesale sales, particularly those with limited hedging or storage capacity.
The Margin Squeeze on Iberdrola and Endesa: A Data-Driven View
Iberdrola (IBE.MC), Spain’s largest utility by market capitalization (€78.4 billion as of April 25, 2026), reported a 9.3% decline in adjusted EBITDA from its liberalized electricity business in Q4 2025, citing lower average realized prices in the Iberian market. Endesa (ELE.MC), majority-owned by Enel, saw its Iberian generation margin fall to €12.8/MWh in Q1 2026 from €18.4/MWh in the prior-year period, according to its consolidated earnings release. Both companies are responding by accelerating investments in distribution networks and customer solutions, which offer more stable, regulated returns.
In contrast, pure-play renewables developers like Solaria (SLR.MC) and Corporación Acciona Energías Renovables (ANE.MC) are experiencing cannibalization risks, with their average selling prices (ASPs) in the wholesale market down 15–20% YoY in early 2026. However, both firms are mitigating exposure through long-term power purchase agreements (PPAs) and expansion into green hydrogen, with Acciona securing a €1.2 billion pipeline of electrolyzer projects as of March 2026.
“When the sun shines too hard and too long, even clean energy becomes a victim of its own success. The market needs more storage, more interconnection and smarter demand response—not just more panels.”
— Jorge Ruiz, Head of Energy Strategy, Iberdrola Renewables, interviewed by Reuters, April 12, 2026
Storage and Interconnection: The Market’s Answer to the Duck Curve
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To address the growing mismatch between supply and demand, Spain is fast-tracking grid-scale battery storage and cross-border interconnection projects. As of April 2026, the country has 4.1 GW of operational battery storage, with another 11.2 GW in advanced development stages, according to BloombergNEF’s Europe Energy Storage Tracker. The largest project under construction is the 600 MW/1.2 GWh Campo de Dalías facility in Almería, developed by Masdar and scheduled for commissioning in Q4 2026.
Simultaneously, the upcoming Golfech-Spanish border interconnection—a 2,000 MW HVDC link with France—is expected to increase export capacity by 30% upon completion in 2027, allowing Spain to offload excess renewable generation during periods of oversupply. Red Eléctrica de España estimates this could reduce annual curtailment of wind and solar by up to 4 TWh, based on 2025 congestion patterns.
“Without adequate storage and transmission, we’re building a system that generates wealth at noon and loses it by sunset. The economics of renewables only function if we can time-shift the energy.”
— Teresa Ribera, Third Vice President of the Spanish Government and Minister for the Ecological Transition, speech at the Iberian Energy Forum, Seville, March 18, 2026
Implications for Inflation and Industrial Competitiveness
The volatility in wholesale electricity prices has direct implications for Spain’s industrial sector, particularly energy-intensive industries such as chemicals, steel, and ceramics. According to the Spanish Chemical Industry Federation (FEIQUE), the average electricity cost for its members rose 4.1% in Q1 2026 despite lower spot prices, due to increased reliance on indexed contracts and capacity payments to ensure supply reliability. This contrasts with the harmonized index of consumer prices (HICP), which showed energy prices declining 2.9% YoY in March 2026, per Eurostat.
For manufacturers, the inability to pass through electricity costs has squeezed EBITDA margins, with the IBEX 35 industrials sector trading at a forward PE ratio of 14.2× as of April 2026, below the European average of 16.8×. Companies like ACS (ACS.MC) and Ferrovial (FER.MC) are responding by expanding on-site generation and demand-side management programs, though adoption remains uneven across mid-sized firms.
Metric
Q1 2025
Q1 2026
Change
Average wholesale electricity price (€/MWh)
68.4
52.1
-23.8%
Solar generation share (% of total)
18.2%
22.7%
+4.5 pp
Wind generation share (% of total)
22.1%
24.3%
+2.2 pp
Gas-fired generation share (% of total)
31.5%
26.9%
-4.6 pp
Iberdrola adjusted EBITDA (€bn)
2.1
1.9
-9.5%
Endesa Iberian generation margin (€/MWh)
18.4
12.8
-30.4%
The Path Forward: From Energy Abundance to Economic Value
The current market structure rewards generation but undervalues flexibility, creating a misalignment between private incentives and system needs. To correct this, Spanish regulators are evaluating reforms to the capacity market and introducing time-of-use tariffs that better reflect grid conditions. The CNMC (National Markets and Competition Commission) launched a consultation in February 2026 on dynamic grid fees for industrial consumers, aiming to incentivize load shifting during periods of high renewable output.
Until such mechanisms scale, the economic value of Spain’s renewable boom will remain captured disproportionately by equipment manufacturers, EPC contractors, and foreign investors in PPAs, while domestic utilities and industrials grapple with revenue uncertainty. The solution lies not in curbing renewable deployment but in building the systems—storage, transmission, demand response, and market design—that can turn abundant sunlight into sustained, dispatchable value.
Senior Editor, Economy
An award-winning financial journalist and analyst, Daniel brings sharp insight to economic trends, markets, and policy shifts. He is recognized for breaking complex topics into clear, actionable reports for readers and investors alike.
