UTILITIES
W hen the war between the US, Israel and Iran began in late February and the Strait of Hormuz closed shortly thereafter, the world braced for a devastating oil shock.
These kinds of crises had been seen before: during the 1973 Yom Kippur War, in 1979 during the Iranian Revolution and in 2022 after Russia’ s invasion of Ukraine. This one, however, was worse than them all.
Governments in South East Asia urged people to work from home to conserve energy. The IEA released its emergency stock of 400 million barrels of oil. The price of fuel reached record highs around the world.
For many countries, the effects were swift and devastating. The experience for Spain, though, was markedly different. While Italian power prices averaged US $ 154 per megawatt hour in March, corresponding Spanish wholesale prices sat at US $ 45, roughly a third of the cost.
These prices were consistently among the lowest across Europe since the conflict began. But how did Spain manage this and what does it say about its energy system?
How gas lost its grip The mechanics of electricity pricing mean that gas, as the most expensive source of power, typically sets the price in any hour it is used.
In Spain, that hour is arriving far less often. Gas now influences electricity
pricing in just 9 % of hours since the start of 2026, down from 52 % in 2021, according to analysis from independent energy think tank Ember.
The trail is easy to follow here. In Spain, wind and solar generation grew by 37 % between 2021 and 2025, pushing gas right to the margins of the country’ s energy mix.
“ Wind and solar growth are acting as a shield against the price impacts of global instability,” says Chris Rosslowe,
54 August 2026