Price surge during power outage
In Portugal's wholesale electricity market, prices soared four times higher than neighbouring Spain on Monday, according to ECO's latest report. The average price per megawatt-hour (MWh) in Portugal was 43.94 euros, with the highest reaching 62.73 euros and the lowest standing at 30.36 euros. In contrast, Spain recorded an average price of 10.89 euros per MWh, with the highest price slightly exceeding the lowest price in Portugal: 35 euros. The lowest recorded in Spain was even below zero, at minus 4 euros per MWh.
Usually, the Iberian market maintains competitive prices, as the two countries' markets are fully integrated. However, following the blackout in Portugal last Monday, the national operator, REN, decided to break the connection with Spain and stop importing electricity produced in that country for security reasons. The operator expects this situation to continue until this Tuesday.
In the days following the blackout, market prices were aligned in the Iberian market, averaging 5.79 euros per MWh. However, since then, price differences have emerged, not always in Spain's favour. For instance, on April 30, Portugal recorded an average price of 20.54 euros, while Spain saw an average of 31.83 euros. On May 1, Portugal experienced an average of 18.85 euros, while Spain averaged 13.29 euros. Since then, Portugal's prices have remained higher until this Monday, when they surpassed Spain by four times.
While these wholesale price differences do not have a direct impact on most consumers' bills, which are contracted at a fixed price for 12 months, they may be noticeable on indexed tariffs invoices. Notably, multiple days of negative prices in April may help to mitigate the negative effects of the blackout on these tariffs.
The significant increase in Portugal's wholesale electricity prices compared to Spain, especially after the blackout on April 28, 2025, can be attributed to the disruption in electricity imports and resulting market dynamics. Before the blackout, Portugal was importing a substantial share of its electricity from Spain—about 33% of its needs—with 20% of annual demand historically depending on this interconnection. The blackout led to a preventive disconnection and the suspension of imports, forcing Portugal to rely more heavily on domestic generation, which is typically more expensive. The immediate impact was a stark divergence in wholesale prices, with Portugal paying significantly higher prices than Spain after the initial days following the blackout. However, the partial and limited resumption of imports from Spain continued to present supply pressures, contributing to the sustained increase in prices.
- The disruption in electricity imports due to the preventive disconnection following the blackout in Portugal in April 2025 has forced the country to rely more on domestic generation, which is typically more expensive in the finance sector, leading to a significant increase in wholesale electricity prices compared to Spain's.
- In the Portuguese industry sector, the significant rise in wholesale electricity prices, especially after the April 2025 blackout, has led to a higher operation cost due to the dependence on more expensive domestic energy generation rather than importing from Spain.
