Spain recorded a maximum electricity price in 2024 of 193 euros per megawatt hour. It was in November. In 2025, there have been peaks of 240 euros in February, before the April blackout, and in October of 230 euros. All this with much higher minimum prices of up to –15 euros MWh. The fluctuations in the cost of electricity have left the average prices of the electricity pool at 63 euros per megawatt hour (MWh) in the first nine months of the year, which represents a year-on-year increase of 21%.
To this amount must be added, on average, another 17 euros of costs for auxiliary services derived from the so-called “reinforced operation” approved by the system operator (Red Eléctrica de España) since the blackout on April 28. With all this, The average electricity price is 80 euros per MWh from January to September.
The increase in electricity prices is linked not only to the reinforced operation applied by the REE manager since the blackout, but also to the recovery of all taxes that were suspended or reduced due to the energy crisis derived from the Russian invasion of Ukraine.
The measure that maintained a reduced VAT of 10% for contracts of up to 10 kilowatts ended last January. Since then, all consumers, regardless of their contracted power, they pay 21% for electricity. Furthermore, the Special Electricity Tax (IEE) from the 0.5% to which it was reduced in 2023, to the current 5.11%and the Tax on the Value of Electrical Energy Production (IVPEE), which is also back in the 7% after its suspension in 2021.
The sum has resulted in the advantage that sectors with high consumption of electrical energy had obtained with respect to their most direct competitors in the European Union, where the average price of electricity was greater than 80 euros MWh, has been diluted. “One has to act on energy prices If we do not want to lose investments in the first export industry of Spain, which employs 240,000 people directly, 7.3% of salaried employment, and almost a million through indirect and induced employment,” he explains to LA RAZÓN. Juan Antonio Labatgeneral director of the employers’ association Spanish Chemical Industry (Feique).
The situation is worrying for basic chemistry, the foundation of the entire industry, since it supplies 98% of it, and which brings together the large plants. The basic chemical industry will accumulate a drop of 8.9% since 2020, compared to the 16.5% growth expected for the sector as a whole. The decline is especially critical from 2022 due to the sharp increase in energy costs, 40% in the case of electricity since 2019, multiplying by two in the case of gas. The impact on employment of the rise in energy is automatic: from January to September 2025, the basic chemistry has lost 3% of positions qualified workers with an average remuneration of 45,000 euros gross.
The chemical and automotive industries, the second most powerful in the EU after Germany, believe that Spain’s growing renewable capacity is capable of offering prices even below 40 euros MWh. However, 28-A has led to a strategy that blocks renewables to ensure service. Given the paralysis of the Government in the face of rising electricity prices and without knowing the date on which REE will withdraw its reinforced operation, the electric companies propose a battery of measuressome of them easy to implement, according to the director of regulation of the electrical employers’ association, assuring this newspaper. Aelec, Marta Castro.
More reactive, more renewable
To begin with, in Spain there is a lack of reactive energy, which is not consumed but is necessary to maintain stable voltage. Generators – conventional and renewable – participate in this control in accordance with REE orders. But, in addition, the operator can use its own tools to stabilize the network: reactors, Statcom, synchronous compensators or disconnection of lines. However, these infrastructures are still insufficient in Spain. In fact, of the six Statcoms planned in the electrical planning, only two were in service on 28-A. Italy, for example, has twice the power of these voltage source converters. Statcoms are electronic solutions capable of generating or absorbing reactive power ultra-fast. By injecting reactive power into the network, the voltage at the connection point can increase. Similarly, by absorbing reactive power, you can lower the voltage. This capacity is crucial in the event of disturbances in the system.
To also mitigate the significant decrease in both the system’s inertia (associated with frequency) and its short-circuit power (associated with voltage) due to the entry of greater renewable electricity, Spain needs to expedite the installation of synchronous compensators that adjust the voltage in a stable, smooth and continuous manner without introducing “harmonics” that can cause distortions and overheating.
In Italy there are 16 synchronous compensators in operation and it continues to expand its network. In July, Spain just approved the installation of eight compensators on the Peninsula; another two in the Canary Islands, in La Palma and Lanzarote, complementing those already planned in Gran Canaria and Tenerife; and the execution of another in Mallorca is brought forward. Synchronous compensators are large, high-cost machines, costing more than 70 million euros.
In addition, there are quickly applied measures that would make it possible to give more security to the system to once again promote green generation that makes electricity cheaper. One of them is to accelerate the entry of renewables into dynamic voltage control which, in many cases, does not require additional investment, just enabling the functions already available in the inverters.
And, although steps are being taken in this direction, “the system will continue to function as it has until now for much of 2026,” Castro warns.
Another recipe is to return to the European voltage standard of 420 kilovolts. In Spain, tensions have been increasing year after year. Faced with this reality, REE’s solution was to consider “normal” up to 435 kilovolts, when the European standard is 420 kV. In practice, this means raising the normality threshold instead of reducing voltages and implies that, while in Europe the plants automatically disconnect if the voltage exceeds 440 kV (with an operating margin of 20 kV), in Spain the margin would be only 5 kV, a range so small that any deviation can cause massive disconnections.
And then there are the tax measures. The easiest to remove and something that the European Commission urges: clean electricity of charges that do not correspond to it, such as the financing of energy policy.
For this reason, the industry is already demanding the disappearance of the Tax on the Value of Electrical Energy Production, created precisely in 2012 to cover a tariff deficit that will disappear at the end of 2027 and which makes our country the only one in the EU that maintains a generation tax.
Also reduce the Special Tax on Electricity to 0.5% for the industry – compared to the general 5.11% – and incorporate most of the adjustment services to tolls. These services added just 4 euros per MWh to the market price, but began a progressive escalation until in 2024 they reached an average of 12 euros/MWh, and this year they will end up above 17 euros/MWh due to the reinforced operation of REE after the blackout.
Feique proposes transferring, at least, the cost of technical restrictions, as the rest of the EU countries do, to tolls (a regulated cost that all consumers pay to finance the remuneration of transport and distribution) and apply a structural and permanent reduction of 80% of tolls for electro-intensive companies. The objective: to convey certainty about competitive energy prices. “We are talking about million-dollar investments over 40 years that need stability,” recalls Labat.