Wind energy and the price of light
| Predicted demand coverage with wind energy (%) | |
| Price schedule PVPC (cent€/KWh) |
Wind energy and the price of light
WHY THE MARKET PRICE LOWERS WITH WIND ENERGY?
The final cost of the domestic electricity bill depends on three main components: regulated costs, the cost of electricity generation and taxes.
The regulated costs of the system are transportation, distribution, debt payment and interest on the tariff deficit, the incentive paid to large industries to reduce their electricity consumption if necessary (interruptibility), payments for capacity to conventional technologies, incentives for renewables and cogeneration, and extra costs for electricity generation in the islands, where it is more expensive to produce than in the Peninsula.
The cost of energy is set in a competitive market (pool) where the different energy sources offer electricity to meet the expected demand one day in advance. Since the cost of wind is zero, wind power producers can offer electricity at a lower price than others. For this reason, the price of the electricity market falls on windier days, displacing technologies with more expensive fuels. At the end of the month, an average is made with the prices of every day. The higher the proportion of wind energy consumed, the less Spanish people pay on their electricity bill. And vice versa.
HOW MUCH DOES WIND ENERGY REDUCE THE ELECTRICITY BILL TO SPANISH CONSUMERS AND COMPANIES?
Wind power generation, which produces electricity at no fuel cost, helps reduce the price of the wholesale electricity market.
The price-reducing effect of wind energy during the period from 2021 to 2025 has been very significant.
Over the past ten years, thanks to wind power, the average annual price of the Spanish electricity market has been between €5 and €31 per MWh lower than it would have been if electricity had been generated in fossil fuel thermal power plants.
In 2025, the price-reducing effect of wind power on the electricity market amounted to €14/MWh. Wind energy helped reduce the average electricity price by 18%. The wind power generation supplied that year resulted in estimated savings of €3.904 billion in the economic value of electricity cleared in the wholesale market.
AVERAGE PRICE VS. GENERATION
The hourly evolution of electricity prices shows a close relationship with renewable generation profiles. During 2025, the daily price curve in the Spanish electricity market shows a marked downward effect during the middle hours of the day, driven by the concentration of photovoltaic generation, along with two price peaks during periods of highest demand in the morning and late afternoon. In conclusion, the Spanish electricity market has consolidated the price profile known as the “duck curve.”
Wind generation, by contrast, shows a more consistent generation profile throughout the day, both during periods of lower and higher prices. At the same time, the highest levels of wind generation occur during the hours when prices are highest, resulting in higher average captured revenues for the technology in the market.
WHEN IS THE INFLUENCE OF WIND ENERGY MORE EVIDENT ON THE PRICES OF LIGHT?
During the windiest months (which coincide with the winter season and the beginning of spring) the market price is lower than in the summer-autumn months, when the wind blows less.
The greater the coverage of electricity demand with wind energy, the lower is the price of electricity for domestic consumers.
WHAT PERCENTAGE OF THE ELECTRICITY DEMAND IS COVERED BY WIND ENERGY?
In 2025, wind power covered 21.8% of mainland electricity demand, making it Spain’s leading source of electricity generation. With 32,910 MW of installed wind capacity, wind energy is the second technology with the highest installed capacity and a key pillar of Spain’s energy mix.