What Ireland Can Learn from Spain on Power Prices, Gas and Electrification
- Lughaidh Ó Broin
- 8 hours ago
- 3 min read
TL;DR
Spain has reduced the influence of gas on wholesale electricity prices by around three quarters since 2019 through rapid wind and solar expansion. Ireland has not yet reached that tipping point and remains highly exposed to gas price volatility.
I had the pleasure of attending the Wind Energy Ireland conference a few weeks ago at the Clayton Hotel in Dublin. It was a great opportunity to meet old and new industry friends, and hear the latest developments from the renewable energy sector.
One of the most interesting sessions I attended came from Frankie Mayo of Ember, who used Spain as a real-world example of how high levels of wind and solar can change electricity prices, and what that could mean for Ireland.
If Ireland and Spain Look Similar, Why Are Their Prices Diverging?
Ireland and Spain share more similarities in their respective electricity markets than might be assumed. Both systems have phased out coal, both rely heavily on wind and solar growth to decarbonise, and both have relatively low levels of interconnection compared to peak demand.
Yet their electricity price outcomes are now diverging. In Spain, wholesale power prices have increasingly decoupled from fossil gas. In Ireland, gas still overwhelmingly sets the price.
Ember’s analysis, as described by Mayo, shows that since 2019, Spain’s rapid wind and solar build-out has reduced the influence of gas generators on wholesale prices by around three-quarters. Even after the Iberian gas price cap ended in late 2023, lower prices persisted.
The key point for Ireland is that price relief did not come from market intervention alone, but from structural change: with more renewables on the grid, gas simply runs less often and for many hours no longer sets the marginal price at all.
Why Does Gas Still Dominate Irish Power Prices?
Ireland has not yet reached that tipping point. While renewable penetration continues to rise, gas generation remains high enough that Irish power prices still track gas closely. As Mayo highlighted, this is not just a consumer price issue but a strategic one. Ireland’s energy import dependency rose to almost 80% in 2024, well above the EU average.
As long as gas dominates price-setting, Ireland remains exposed to international fuel volatility.
What Is the Grid Warning from Spain?
The Spanish experience also underlines what Ireland must avoid. Spain has underinvested in grid infrastructure for years, leading to increased curtailment and a growing reliance on gas for grid stability, especially since the major blackout in 2025, which I’m sure we all remember.
As the rollout of renewables in Ireland continues, grid investment and system services cannot be an afterthought. One advantage Ireland has from a grid stability point of view is in synchronous condensers. Surprisingly, it seems there are none of these in the entire Iberian peninsula, whereas Ireland has one, with at least four more in development.
How Does Electrification Fit Into This?
In his presentation, Mayo linked all of this to electrification. Ireland’s transition cannot stop at renewable generation alone. Electrification of transport, heat and industry is essential to reduce fossil fuel imports and improve energy security. That, in turn, depends on delivering consistently low electricity prices.
Clean power must be cheap enough to pull demand onto the grid.
The Message for Ireland
The message for Ireland was clear and timely: accelerating wind and solar can break the link between gas and power prices, but only if grid investment, flexibility and electrification move in step. Spain shows both what is possible, but with a warning on what can happen when parts of the system fall behind.
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Lughaidh Ó Broin
Principal Technical Advisor
Lughaidh is a Single Electricity Market expert, having carried out considerable research into the economic effect of the single electricity market on the wind industry.
