Spain recorded about 400 hours of negative prices in the first quarter of 2026, against about 48 hours a year earlier.
Solar capture rates in Spain fell from around 90% in spring 2022 to 40% in spring 2026.
About 83% of Spain’s distribution grid nodes are saturated, and about 67 GW of access was requested for new demand in 2024.
Spain’s first capacity market, approved by the European Commission in May 2026 with a budget of up to €9 billion over 10 years, came into force on 18 September 2026.
How the market works
How does the Spanish electricity market work?
Spain and Portugal share the Iberian wholesale market, with a price zone each. OMIE runs the day-ahead and intraday markets, Red Eléctrica de España (REE), the transmission system operator, runs balancing services and resolves technical constraints, the CNMC regulates the market and networks, and the Ministry for the Ecological Transition (MITECO) sets energy policy, including the national energy and climate plan (PNIEC).
Spain has a lot of inherent flexibility from pumped hydro and combined cycle gas turbines (CCGTs), and around 50 GW of solar, but it has been slower than its European neighbours to add battery storage. Regulatory barriers to batteries are now starting to lift, and new markets, such as the capacity market, are coming in.
Which markets can you trade power in in Spain?
| Market | Run by | How it works |
|---|---|---|
01Day-ahead market | OMIE | Coupled with the rest of Europe through Single Day-Ahead Coupling, in 15-minute products since 1 October 2025 |
02Intraday auctions | OMIE | Part of the pan-European intraday auctions since 13 June 2024 |
03Intraday continuous | OMIE | Continuous cross-border trading up to shortly before delivery |
04Frequency containment reserve (FCR) | REE | Mandatory for eligible generators and not paid |
05Automatic frequency restoration reserve (aFRR) | REE | Secondary regulation, procured in quarter-hourly blocks |
06Manual frequency restoration reserve (mFRR) | REE | Tertiary regulation |
07Technical constraints | REE | Redispatch where the network can’t carry scheduled flows |
08Capacity market | REE, supervised by the CNMC | Pay-as-bid auctions for firm capacity, in force since 18 September 2026 |
How does Spain’s market compare with GB?
| Feature | Spain | Great Britain |
|---|---|---|
| Market area | Iberian market with Portugal, coupled with the rest of Europe | National market, not coupled with the EU since 2021 |
| Day-ahead products | 15-minute | Hourly and half-hourly |
| Balancing | REE’s aFRR, mFRR and technical constraints | NESO’s Balancing Mechanism and Dynamic Containment, Moderation and Regulation |
| Capacity market | New: in force since September 2026, no auction yet | Since 2014, with T-4 and T-1 auctions |
| Solar | Around 50 GW; capture rates down to 40% in spring 2026 | Load factor of about 11% to 12% |
Experts
Who are Gridcog’s Spanish market experts?
Gridcog opened its Madrid office in 2026, with a team focused on the Iberian market.
Carlos Cortiñas
Senior Energy Associate, Madrid
Focused on the Iberian market. Before Gridcog, he spent two and a half years in structured finance at Grenergy, closing financing for solar, standalone battery and hybrid projects.
Sam MacIntyre
Product Manager, Madrid
Previously the lead Iberian long-term fundamental modeller in bp’s Power Market Insights team, after McKinsey Energy Solutions.
Laura Hoffmann-Ostenhof
Central Europe Industry Lead
Author of Gridcog’s guide to Europe’s capacity markets for battery storage.
Genna Boyle
CCO and Head of EMEA
Began her career in energy trading at Contact Energy in New Zealand, then helped set up the trading team at Limejump and went on to lead its commercial team.
Who models Spanish projects in Gridcog?
Developers and IPPs, investors and funds, energy majors, large energy users and data centres, and consultants.
Frequently asked questions
Several bodies share the job. OMIE operates the day-ahead and intraday markets for Spain and Portugal. Red Eléctrica de España is the transmission system operator: it balances the system, buys balancing services and will run the capacity market. The CNMC regulates the market and networks, and MITECO, the energy ministry, sets policy and the national energy and climate plan.
Yes, since 18 September 2026. Ministerial Order TED/966/2026 created a centralised capacity market, approved by the European Commission in May 2026 with a budget of up to €9 billion over 10 years. Storage, renewables and demand response can take part, with terms of up to 15 years for new investment. No auction had been held as of 30 September 2026.
More every year. Spain recorded about 400 hours of negative prices in the first quarter of 2026 alone, against 48 hours in the first quarter of 2025, and 555 hours across the whole of 2025. Negative prices cluster in the middle of sunny days, when solar output is highest.
The updated national energy and climate plan (PNIEC), approved in September 2024, targets 81% renewable electricity by 2030. That includes 76 GW of solar, 62 GW of wind, of which 3 GW is offshore, and 22.5 GW of storage, including pumped hydro and solar thermal storage. Battery storage is the part furthest behind, with most projects still in the pipeline.
Hybridisation (hibridación) means adding another technology, most often a battery, to an existing or planned renewable plant so that both share the same grid connection. In Spain it lets a solar or wind project move energy out of the cheapest hours, earn from balancing services and make fuller use of an access point that is hard to obtain.
Complex voltage stability issues. On 28 April 2025, multiple trips at 12:33 caused frequency to fall, Spain and Portugal disconnected from the rest of Europe seconds later, and both countries lost power. A lack of batteries didn’t cause it on its own, but the event was a wake-up call about Spain’s need for flexibility.
Under a draft Royal Decree, data centres above 10 MW would need to cover at least 80% of their consumption with new renewable generation, matched hour by hour, with battery storage counting towards the hourly match. A revised draft went to the Council of State on 26 October 2026; the decree had not been approved at the time of writing.
Yes. Gridcog models Spanish day-ahead prices, aFRR and mFRR, the capacity market and access tariffs, alongside hybrid solar, wind and battery projects on one connection. Prosolia Energy has applied it to more than 200 projects across Spain, Portugal and beyond, and Gridcog’s Madrid team supports customers in Spain and Portugal.
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The team behind Gridcog
Fabian Le Gay Brereton
Chief Executive Officer & Co-Founder
Previously co-founded Greensense, acquired by ERM Power (now Shell Energy).
Pete Tickler
Chief Product Officer & Co-Founder
Co-founded Greensense and led digital innovation at ERM Power (now Shell Energy).
Genna Boyle
Chief Commercial Officer & Head of EMEA
More than 10 years in energy strategy, trading and renewables, with senior roles at Battery Optimiser and Limejump.
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