In 2020, average Spanish PVPC was 0.055 €/kWh. In August 2022, it touched 0.544 €/kWh — ten times higher. Today, in 2026, it's around 0.11 €/kWh, nearly double pre-pandemic levels.
What happened — and what should you expect going forward?
The chain — from gas markets to your bill
Spanish wholesale electricity (and most of Europe's) is priced by a marginal pricing system. The most expensive plant entering production each hour sets the clearing price for everyone else. That marginal plant is usually a combined-cycle gas plant.
So when natural gas gets expensive, all electricity gets expensive — even electricity generated by wind or solar. Wind doesn't suddenly cost more to produce, but it gets paid the same clearing price as gas.
The timeline:
- 2020: COVID demand crash; gas at multi-year lows. Cheap PVPC.
- 2021: post-pandemic rebound; European gas tightening.
- Summer 2022: Russia invades Ukraine → Nord Stream pipeline severed → European gas panic → historic record electricity prices across the EU.
- 2023: stabilization; European storage refilled by sea (LNG imports).
- 2024: "new normal" with prices still elevated above pre-pandemic.
- 2025–2026: consolidation around 0.10–0.12 €/kWh annual averages.
The Spanish government's three big interventions
During the crisis, three policy moves still shape your bill today:
1. The "Iberian Exception"
Spain and Portugal won permission from Brussels to cap the gas price used in wholesale market formation, June 2022 to December 2023. Result: Iberian electricity prices were 30–40% lower than France or Germany during that period.
2. VAT cuts
The standard VAT on electricity (21%) was cut to 5% in 2022, then to 10% in 2024. As of 2026, it oscillates between 10% (when wholesale prices stay contained) and 21% (when they spike). Each 5 VAT points = ~5% of your final bill.
3. Electricity tax cuts
The 5.11% special tax dropped to 0.5% during the crisis. It returned to 5.11% in 2024.
Which parts of your bill move with inflation?
Not all bill lines react the same:
| Line | Inflation-sensitive? |
|---|---|
| Energy consumed (PVPC) | Yes — heavily (tracks gas + CO₂) |
| Tolls and charges | Slowly — annual CNMC review |
| Contracted power | Slow — adjusted by CNMC review |
| Meter rental | Almost not at all |
| Electricity tax | Political — depends on government |
| VAT | Political — depends on situation |
The first one moves the most. That's why the gap between off-peak and peak hours keeps widening: when gas spikes peak prices, off-peak prices (with sun or wind) barely move.
What to expect through 2027
Three structural trends:
1. More renewables = days with negative prices
Spain is adding roughly 8 GW of solar PV and 3 GW of wind per year. On windy weekends or sunny May Saturdays with low demand, wholesale prices already touch zero or go negative. In 2025, Spain saw 180 hours with negative wholesale prices.
Implication: the gap between cheap and expensive hours will keep growing. Anyone who can shift consumption to cheap hours will benefit more every year.
2. EVs push up nighttime demand
If Spain hits 1 million electric vehicles by 2027, demand between 00:00 and 06:00 rises. This may shrink the off-peak/peak gap somewhat — EVs absorb what was previously "free" wind energy at night.
3. Grid-scale batteries smooth the curve
Industrial-scale batteries are starting to come online in Spain (Aragón, Andalucía, Murcia projects). Once operational, they buy electricity in cheap hours and sell in expensive ones. This will push cheap hours up slightly and pull expensive hours down — convergence, not transformation.
What you should do
If energy inflation is structural (and the data says it is, at least through 2027), the two levers stay the same:
- Exploit the gap between cheap and expensive hours. That gap is widening every year. Shifting laundry, dishes, and water heating to off-peak saves more in 2026 than in 2020.
- Reduce absolute consumption. LEDs, insulation, efficient appliances. Always saves money, regardless of where the kWh price sits.
Today's price is on the homepage — and the 24-hour heatmap shows you exactly where the cheap windows sit.