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Spain has become one of Europe’s cheapest power markets

janrosenow.substack.com

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Re: Spain has become one of Europe’s cheapest power markets

#41

Post by hn_throwaway_99 »

mhh__ wrote: post #33
pyrale wrote: post #27

The author's point is that Spain's electricity is very cheap compared to other European countries thanks to its great electricity mix, etc. The reality is that Spain's electricity is cheap because it is relatively insulated from Europe's core network, because its interconnections with other countries are limited. In financial words, there is a spread with the rest of Europe because the ways to arbitrage that spread a…

This is a lesson in how electricity isn't really a commodity e.g. it's very very difficult to send some electrons from one side of the world to another.

But all commodities are like this. It is actually pretty easy to send some electrons great distances, or heck at least it's a well understood, solved problem. It's just that those interconnections haven't been built yet.

Heck, oil is probably the "default" example of what a commodity is, but we're now all acutely aware of what happens when moving that oil from one place to another becomes exceedingly difficult.

Re: Spain has become one of Europe’s cheapest power markets

#42

Post by madspindel »

fundatus wrote: post #24
alecco wrote: post #2

> Damian Cortinas, chair of ENTSO-E’s board, told the Financial Times that “the issue is not about renewables” but about the grid’s ability to manage “fast voltage variations” that can destabilise the system. Unusual oscillations triggered a cascade of plant disconnections, and grid managers lost control. The real lesson is not that Spain has gone too far on wind and solar, YES THEY DID, they went as far as making nu…

> made the EU leadership turn and now they want nuclear They don't _actually_ want nuclear, luckily it's just lip service. Because it doesn't solve the problem surfaced by the US-Israel-Iran war: You'd still be dependent on other countries for your (nuclear) fuel needs.

> You'd still be dependent on other countries for your (nuclear) fuel needs.

Like Canada and in the future also Sweden? Two really hostile countries to be dependent on.

Re: Spain has become one of Europe’s cheapest power markets

#43

Post by ragebol »

miohtama wrote: post #29
pyrale wrote: post #27

The author's point is that Spain's electricity is very cheap compared to other European countries thanks to its great electricity mix, etc. The reality is that Spain's electricity is cheap because it is relatively insulated from Europe's core network, because its interconnections with other countries are limited. In financial words, there is a spread with the rest of Europe because the ways to arbitrage that spread a…

Hmm. Everyone should just disconnect Germany, let them freeze, and enjoy cheap electricity?

Spain's neighbors could also have lower energy prices with more interconnection to Spain. The whole network diversifies, which would be more beneficial for Europe as a whole.

Re: Spain has become one of Europe’s cheapest power markets

#44

Post by hn_throwaway_99 »

pydry wrote: post #11
PaulKeeble wrote: post #7

The past few years has also had Solar continuing to decrease in price so its increasingly going to be the primary choice. On top of that battery prices have been plummeting too so that now Solar + battery is cheaper than other options like Nuclear and especially Gas. Most of the EU will be running on Wind and Solar in the coming years, its a change that is now rapidly occuring based entirely on the rare economics. So…

1/5th the price of nuclear. Probably when combined with batteries it is half the price. There are some colder areas in northern europe especially where solar doesnt work as well but they also tend to be better served for hydro (which can also store power).

Northern locales though have a much greater energy need for heating in the winter. So the "battery" solutions can often just be cheap heat batteries because there is not so much a thing as "waste heat" - that heat can be used directly without worrying as much about efficiency losses in conversion.

There are already a bunch of examples of Northern locales using these heat batteries - just heat up a big block of something when energy is cheap and solar/wind are overproducing, then use a network of insulated pipes to distribute that heated water.

Re: Spain has become one of Europe’s cheapest power markets

#45

Post by HPsquared »

joe_mamba wrote: post #22
ZeroGravitas wrote: post #18

Earlier quoted context omitted.

Trading across borders seems to be a part of this story. If your local price is high you can import, if it's low you can export. If you're at the end of a grid and/or your transmission capacity is limited your price has the possibility to go higher or lower without that damping mechanism. Electricitymaps has a pricing layer which seems to show central Europe moving in sync when I randomly check it: https://app.electr…

So energy in Spain is cheap because they produce a lot but can't sell a lot easily, and Austria/Central Europe is expensive because they sell their domestic energy too easily? If this is what you meant, then it sounds like an argument against free trade, if it means you keep ending up with the short stick.

Free trade doesn't always benefit everyone equally, only a net benefit overall. It's a bit like how people often misinterpret the second law of thermodynamics "but the entropy decreased when the ice froze!"

Re: Spain has become one of Europe’s cheapest power markets

#46

Post by pyrale »

hn_throwaway_99 wrote: post #41
mhh__ wrote: post #33

Earlier quoted context omitted.

This is a lesson in how electricity isn't really a commodity e.g. it's very very difficult to send some electrons from one side of the world to another.

But all commodities are like this. It is actually pretty easy to send some electrons great distances, or heck at least it's a well understood, solved problem. It's just that those interconnections haven't been built yet. Heck, oil is probably the "default" example of what a commodity is, but we're now all acutely aware of what happens when moving that oil from one place to another becomes exceedingly difficult.

> or heck at least it's a well understood, solved problem.

It is not. As a case in my point, Spain had a blackout last year (and I completely believe they are competent professionals - the task is just hard).

> It's just that those interconnections haven't been built yet.

They haven't been built because the grid isn't just a technical problem. It's also a socioeconomic problem, and adding new interconnections would require finding who needs to pay for it ; and currently, that question has no answer.

Re: Spain has become one of Europe’s cheapest power markets

#47

Post by HPsquared »

joe_mamba wrote: post #32
ZeroGravitas wrote: post #30

Earlier quoted context omitted.

Economists would say that the money coming in outweighs the higher costs and therefore you could redistribute that money and everyone comes out ahead. Whether that happens in real life is a different question.

>Economists would say that the money coming in Does that money go directly into my pocket so I can afford the more expensive energy? Or does it go into the pocket of private energy companies? Because I feel like there's some faults with this "free market", which is mostly just socializing losses and privatizing profits.

And what if the energy companies are owned by foreign investors?

Re: Spain has become one of Europe’s cheapest power markets

#48

Post by mono442 »

The reality is that expensive electricity in the EU is by design. The EU ETS imposes heavy taxes on fossil fuels (and they are set to increase even more), which in turn causes the price of electricity to rise. Fully renewable electricity generation is still a long way off, so this will continue for a long time. But it is entirely a self-imposed political problem and could easily be fixed by getting rid of the EU ETS or capping the price of emissions at a more reasonable level.

Re: Spain has become one of Europe’s cheapest power markets

#49

Post by blitzar »

energy123 wrote: post #19
badpun wrote: post #16

Earlier quoted context omitted.

How much would it cost to build out batteries which cover entire continent's electricy needs for say three weeks (as there can be 2-3 week lulls of no wind and no sun in Europe in the winter)? Cause that sounds like a lot of batteries. Not to mention, if a freak 4 week lull occurs, we'll go back to Middle Ages for a week.

Australia's CSIRO studied this for Australia, renewables were half the cost of nuclear, factoring in storage and transmission for both renewables and nuclear (yes, nuclear also needs storage because energy demand varies with time). Australia is uniquely endowed with sun and land, so other countries/regions may arrive at different results.

If you live in Australia, have a house and roof, you're a bloody idiot if you didnt install solar.

Re: Spain has become one of Europe’s cheapest power markets

#50

Post by gman83 »

mono442 wrote: post #48

The reality is that expensive electricity in the EU is by design. The EU ETS imposes heavy taxes on fossil fuels (and they are set to increase even more), which in turn causes the price of electricity to rise. Fully renewable electricity generation is still a long way off, so this will continue for a long time. But it is entirely a self-imposed political problem and could easily be fixed by getting rid of the EU ETS…

Yeah, crippling Europe in the long term for short term gain might not be the best idea - https://www.theguardian.com/environment/2026/apr/15/critical...
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