Spanish households have saved approximately €10 per month on electricity bills since the Hormuz strait effectively closed in March. According to analysis from the independent energy think tank Ember, Spain’s transition to renewable energy has reduced the influence of fossil fuels on electricity prices by 75% since 2019.
How did Spain lower electricity costs while EU prices rose?
While many European nations faced rising energy costs following the outbreak of the Iran war, Spain’s electricity bills trended downward. In March, power prices in more gas-dependent Italy averaged €143/MWh. In contrast, Spanish wholesale power prices stood at €42/MWh, according to Ember data.
The primary driver of this price difference is the country’s reduced reliance on natural gas. In 2021, gas influenced power pricing during 52% of operating hours. By the beginning of 2026, that influence fell to just 9% of hours, Ember reports.
This shift follows a significant boom in renewable infrastructure. Wind and solar energy capacity grew by 37% between 2021 and 2025. Since 2019, Spain has added over 40 GW of wind and solar capacity, a figure surpassed only by Germany in the European Union.
Spain moved away from coal so rapidly that the country used zero coal-fired power in August 2025. This is a major shift from just ten years ago, when coal provided 25% of the nation’s electricity.
Why are renewables acting as a shield against global instability?
Renewable energy serves as a buffer against the price volatility caused by international conflicts. Chris Rosslowe, author of the Ember report, states that wind and solar growth acts as a shield against the price impacts of global instability.
When global gas prices spike, renewables help keep power bills lower for both Spanish households and businesses. This stands in contrast to the broader European Union, which has seen its fossil fuel imports increase since the start of the Iran war.
The financial impact on the EU has been substantial. The bloc has faced a €60 billion energy bill linked to the war. However, Alice Moscovici, a researcher at the Jacques Delors Institute, notes that less than 5% of that amount—roughly €2 billion—has been directed toward electrification measures.
Electrification is considered a structural investment that reduces long-term exposure to volatile fossil fuel markets and builds energy resilience.
How do electricity taxes differ between Spain and the rest of Europe?
Tax structures play a significant role in what consumers pay at the end of the month. According to the International Energy Agency, taxes and levies accounted for 28% of the average European consumer’s electricity bill last year.
Spain has actively used tax policy to provide consumer relief and encourage the transition to electric power. Between March and May 2026, temporary tax cuts removed €8 from the typical monthly domestic electricity bill. This move also acts as a lever to encourage electrification, reducing dependence on imported fossil fuels.
The comparison between tax burdens on electricity versus fossil fuels is notable. In 2025, electricity taxes in Spain were 4.2 times higher than those on fossil gas. In Germany, electricity taxes were 3.2 times higher than gas taxes.
While consumer bills were being managed, fossil fuel companies saw record earnings. A March 2026 study from Greenpeace found that EU oil companies earned an additional €81.4 million in profit every day during the energy crisis.
Transitioning to electric heating and transport can reduce a household’s exposure to global gas price spikes, provided the national grid has high renewable integration.
What lessons were learned from the 2025 Spanish power blackout?
The transition to renewables has not been without technical challenges. In April 2025, Spain experienced a massive nationwide power cut. A 472-page report concluded that a series of voltage fluctuations caused the blackout, which disrupted metro tunnels, businesses, and mobile networks.
Despite the crisis, the Spanish government maintained its renewable momentum. Between May 2025 and February 2026, Spain added an average of 1.3 GW of wind and solar capacity per month, exceeding the previous year’s average of 1.2 GW.
To prevent future instability, the government has implemented emergency measures to improve system resilience. According to Ember, these measures include exempting battery storage at existing renewable plants from additional environmental assessments. This policy aims to make it easier to integrate storage, further reducing the role of gas in the power system.
Frequently Asked Questions
Since the closure of the Hormuz strait in March, Spanish households have saved approximately €10 per month on electricity bills.
Spain has added more than 40 GW of wind and solar capacity since 2019. While this is a massive increase, Germany’s power market remains twice the size of Spain’s.
A 472-page report attributed the April 2025 blackout to a series of voltage fluctuations within the power grid.
The influence of gas on power pricing has dropped from 52% of hours in 2021 to just 9% of hours at the start of 2026.
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