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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

#131

Post by try-working »

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 correct. The price for electricity has been increased by 2x-10x in the Nordics because of the interconnect with Germany.

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

#132

Post by pyrale »

sega_sai wrote: post #93
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…

It is worth mentioning that the linked FT article supporting the claim is from 12 years ago.

Yeah, that's not new. Here's another article from 2025, in the wake of the blackout.

https://www.politico.eu/article/france-needs-eu-push-on-powe...

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

#133

Post by verzali »

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.

It is actually very easy to move electrons. I only need to get on an aeroplane to move a lot of electrons around.

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

#134

Post by pyrale »

PowerElectronix wrote: post #105
ragebol wrote: post #43

Earlier quoted context omitted.

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.

France systematicaly refuses to increase the power of their interconect with Spain, as well as to make a gas pipe that would provide cheap Algerian gas to the rest of europe.

An interconnection is being built up as we speak.

That being said, building new interconnections makes no economic sense for France. The country has no unserved consumers close to the border. That means any electricity imported from Spain would have to be carried further. That involves grid spending paid for by french consumers, without any benefit for them.

The same goes for gas pipelines. No one enjoys big infrastructure projects for stuff they don't really need.

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

#135

Post by zejn »

gregorygoc wrote: post #98
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…

Don’t underestimate the corrupt politics of some countries, especially Germany. There are individuals actively working against the global cost curve and trying to misallocate the capital to gas at the large scale. Katherine Reiche is the primary example. She’s pushing for building as much capacity for gas plants as possible, instead of choosing battery storage as the cheapest option.

Ha, yes, a lot of deniers/delayers are going on about how Germany "wasted" billion on renewables, when in fact they had a booming solar industry, which got nuked by politicians, who changed the policies, as can be seen in 39C3 video "Recharge your batteries with us".

Was the subsidy system which was in effect in 2010's unsustainable? I think so, yeah. But the changed policies resulted in companies producing solar going bust, and the Chinese firms, which were doing fine, were able to buy out the patents and know how.

So, did Germany waste billions? Yes, but by letting the solar producers go bust.

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

#136

Post by Rygian »

m463 wrote: post #89
Rygian wrote: post #66

Earlier quoted context omitted.

Punitive pricing is a great thing. The less energy you spend to deliver value, the better for everyone.

I can think of many many examples of using electricity as a greater value to society than not using it.

You misread my comment.

If someone can deliver the same greater value to society using less electricity than you, they should be rewarded.

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

#137

Post by MakersF »

PowerElectronix wrote: post #104
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…

To add to this, Spain gets it gas from Algeria, the rest of europe gets it from Russia and the middle east. So yeah, It's easy to have better prices when your gas is comparatively free from disruptions.

What are you talking about? Spain is one of the biggest importer of Russia LNG, at 25% https://www.reuters.com/business/energy/us-remains-spains-to...

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

#138

Post by BonitaPersona »

PowerElectronix wrote: post #104
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…

To add to this, Spain gets it gas from Algeria, the rest of europe gets it from Russia and the middle east. So yeah, It's easy to have better prices when your gas is comparatively free from disruptions.

[flagged]

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

#139

Post by MakersF »

ViewTrick1002 wrote: post #55
joe_mamba wrote: post #22

Earlier quoted context omitted.

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.

Electricity is expensive in Central Europe because the ETS system (carbon trading) has made fossil based production expensive. We’re right in the middle of the transition with maximum volatility swinging between extremely cheap renewables and expensive fossil plants.

I checked and it looks like ETS are increasing prices of gas produced electricity 20-30€/MWh. So not little (although peaks are around 140€/MWh). But these are taxes that can be used to reduce the reliance on gas (actually, it's mandatory to use them for transition projects).

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

#140

Post by BonitaPersona »

throwaway_2626 wrote: post #96
hunterpayne wrote: post #92

Earlier quoted context omitted.

The article is a mix of facts and figures on the supply side. However, the real reason for the current cheap prices is the lack of demand. Spain's economy isn't doing well and they have hurt their tourism industry with politics. That's most of the reason for the temporarily cheap power that they mostly import from their neighbor. Being dishonest about their energy policy is pure politics.

Spain's energy policy could easily be improved, but saying that Spain's economy isn't doing well is disingenuous. In terms of GDP, it's one of the countries with the fastest growth in the EU [1]. Also, our economy is becoming more diversified, precisely thanks to lower energy prices that attract industries that previously gravitated towards Germany and Eastern Europe. [2] I'm curious about how politics have hurt tour…

The GDP is growing simply because the population is growing massively. This is such a low-quality measurement driven by government propaganda. Quality of life, GDP per capita, and plenty of other measurements are needed to actually evaluate how an economy is going.

And Spain's economy is far, very far away from "going like a rocket", like your misinformation echo-chamber tries to parrot.

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