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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
by pyrale 5mo ago
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 are extremely limited. If Spain was located near Germany and well interconnected, their prices would look like Germany's. And while cheap energy is pictured by op as a good thing, Spain understands very well that higher prices are good for its renewables industry, and is pressing for more interconnections[1].
The overall tone of the article feels like the author is here to extoll the virtues of renewables.
[1]: https://www.ft.com/content/8e94079c-585f-11e4-b331-00144feab7de?syn-25a6b1a6=1 https://www.ft.com/content/8e94079c-585f-11e4-b331-00144feab...
- miohtama 5mo agoHmm. Everyone should just disconnect Germany, let them freeze, and enjoy cheap electricity?
- noprocrasted 5mo agoThen you'd have people run extension cords across the border and selling their cheap electricity at inflated prices to their freezing neighbor.
- pyrale 5mo agoThat's not my point. My point is that the price spread between EU electricity markets speaks more to the availability of interconnections than to the virtues of one country's electricity mix. The article gets to that conclusion because that's what it was looking for. The one question the article leaves open, but which is pretty relevant, is the question about who should pays for stability services to the grid.
- watwut 5mo agoAbsent interconnectivity, the spread of the price is literally virtues of the electricity mix. With interconnectivity, those virtues are less visible in local prices. They would be visible in earnings.
- generic92034 5mo agoYou forget the times with an overproduction of electrical energy in Germany. Then they sell it for a negative price to the neighbor countries. Later, when they need more energy they buy it back at a premium. It is good business for neighbor countries with enough storage (pumping hydro, etc.).
- mhh__ 5mo agonormally when you buy electricity it costs money!
- victorbjorklund 5mo agoMany times negative spot prices.
- XorNot 5mo agoWhich is bad, it's a market and infrastructure failure. Negative prices are to get generators to turn off. A new feature on solar inverters is curtailment mode so they can be remote shutdown when the grid goes negative, since if you're on wholesale energy pricing you'll be charged if you keep driving the grid.
- ZeroGravitas 5mo agoIt's a good thing and you explain why in your second paragraph. What gives people the right incentives to increase or reduce curtailment? The market price being negative or positive.
- XorNot 5mo agoIf the market is being driven negative then it means there's an oversupply. Which means overall the price of electricity is higher then it should be - negative prices have to be compensated by higher positive prices at other times, and reduce the return on capital to build new power infrastructure of all sorts. Turning off productive solar panels is wasting power.
- ZeroGravitas 5mo agoThe negative price can also be thought of as paying people to use the productive solar panels rather than turn them off, it's a two sided market that drives demand to times of clean and cheap energy, which lowers costs for everyone.
- ragebol 5mo agoSpain'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.
- pyrale 5mo agoThe issue is that Spain has three interconnected neighbours (France, Portugal and Morocco) and all of them are overflowing with electricity. The best candidate for lowering prices would be France, but France would most likely re-export that electricity to other countries, and paying to build up the internal grid to carry electricity that is neither bought by nor sold to French actors isn't very attractive. Ideally Spain would interconnect with Italy, but that's more expensive.
- crote 5mo agoThere has already been a serious proposal for a HVDC cable from Morocco to the UK. If that's possible, why not go for Spain-Germany?
- toast0 5mo agoHvdc in the ocean requires way less right of way than hvdc over land. Running oceanic hvdc from Spain to Germany might have some trouble in the English channel where it would be in territorial waters. Spain to UK might make more sense.
- pyrale 5mo agoSpain has also floated he idea of a HVDC cable to the UK, but it's never happened. Sometimes, headlines are out of control.
- Leonard_of_Q 5mo agoThat would raise electricity prices in Spain just like prices in Sweden - which traditionally had low prices - went up with the 'diversification' of the European distribution network. While these price effects were mostly seen in the southern half of the country due to the way Sweden is divided into 4 price regions with most of the interconnects being found in the southern-most region the recently inaugurated 'Aurora' interconnect with Finland caused prices in the north of Sweden to shoot up [1]. [1] https://www.aftonbladet.se/minekonomi/a/Exwx4A/elprissmocka-mot-norra-sverige-finsk-kabel-har-gett-hogre-priser https://www.aftonbladet.se/minekonomi/a/Exwx4A/elprissmocka-...
- izacus 5mo ago[dead]
- mhh__ 5mo agoThis 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.
- pyrale 5mo agoThat it is treated as such speaks volumes to the craft of the people designing and maintaining the grid.
- mhh__ 5mo agoUnfortunately in Britain at least politicians are absolutely dead set on taking the piss / abusing this by e.g. adding huge amounts of subsidy and stealth taxes into what should be price discovery mechanisms (or for example when was the last time you heard someone talking about how cheap renewables are and discuss the CfD schemes).
- tialaramex 5mo ago> when was the last time you heard someone talking about how cheap renewables are and discuss the CfD schemes All the time? Every single HN discussion about this ends mentioning CfD, often as if it's some secret nobody knows about even though the CfD strike prices are often headline news when they're agreed.
- mhh__ 5mo agoI've basically only just seen this stuff started to be discussed critically in the media in fairly recent years. not including $work discussions with energy traders.
- tialaramex 5mo ago> in fairly recent years Although this financial instrument dates from late last century, its use in energy markets is much newer, the UK began using CfDs for electricity about a decade ago. So, yeah, if you recall conversation about wholesale electricity prices back in 2010 they wouldn't have mentioned CfDs for the same reason they didn't mention the effect of Russia's invasion of Ukraine, it hadn't happened yet. Back then renewable electricity generation schemes were subsidised very differently.
- iot_devs 5mo agoI mean it is hard to argue with the number - I believe everyone will benefit for more interconnections. More energy to Europe, more money to Spain. And for the numbers it seems obvious that renewables are a fundamental part of the picture.
- maartenscholl 5mo agoThis is an interesting point about energy market balancing but it has causality backwards. Spain simply has a better energy mix than Germany, no matter how big the spread between the countries is as a function of interconnectedness.
- fleroviumna 5mo ago[dead]
- hunterpayne 5mo agoThe 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.
- throwaway_2626 5mo agoSpain'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 tourism industry, though, if you could elaborate. [1] https://ec.europa.eu/eurostat/web/products-euro-indicators/w/2-30042026-bp https://ec.europa.eu/eurostat/web/products-euro-indicators/w... [2] https://www.reuters.com/world/china/stellantis-chinas-leapmotor-plan-expand-ev-partnership-boost-european-production-2026-05-08/ https://www.reuters.com/world/china/stellantis-chinas-leapmo...
- zdragnar 5mo agoIt's easy to win the fastest growing award when it has been doing so poorly before. Youth unemployment is at a near twenty year low of 24%, down from recent years around 30%. As for politics hurting tourism, there's some formal policies restricting airbnbs and placing higher tourism related taxes on over-encumbered areas, but I think most of the detraction is the anti-tourism protests from locals, which were quite large in 2024-2025. You'd have to consider local sentiment as "politics" for the statement to really be true, I think.
- sega_sai 5mo agoIt is worth mentioning that the linked FT article supporting the claim is from 12 years ago.
- pyrale 5mo agoYeah, 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-power-connectors-portugal-demands/ https://www.politico.eu/article/france-needs-eu-push-on-powe...
- deleted 5mo ago[deleted]
- PowerElectronix 5mo agoTo 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.
- tialaramex 5mo agoSure, Algeria does have gas pipelines to Europe. Two of them actually. The smaller one goes to Spain and Spain as we see in this article has lower electricity wholesale prices. But er, the bigger Algerian pipeline goes to Italy, a country with notoriously high energy prices. So if Algerian gas was the secret that's actually a big problem for you.
- spiderfarmer 5mo agoCheck your facts.
- MakersF 5mo agoWhat 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-top-gas-source-russian-shipments-rise-2026-04-10/ https://www.reuters.com/business/energy/us-remains-spains-to...
- BonitaPersona 5mo ago[flagged]
- g8oz 5mo agoThe relative isolation you cite for power being cheap were true a decade ago when power was expensive. The author is correct in extolling the virtues of renewables.
- try-working 5mo agoThis is correct. The price for electricity has been increased by 2x-10x in the Nordics because of the interconnect with Germany.