J. A. Martínez and Leonardo Gago || Covers 32% of the electricity mix in January - and up to 60% in the last week - driving the price negative at times (-€0.5/MWh)
Juan Antonio Martínez and Leonardo Gago (Grupo ASE) •
The average price of the wholesale electricity market (POOL) closed January at €71.67/MWh, representing a decrease of 25.9% compared to the same month last year and 8% less than in December.
Extreme volatility. The start of 2026 was marked by extreme price volatility, directly conditioned by the weather. During the central days of January, an episode of intense cold, combined with high electricity demand and low renewable contribution, drove prices to reach €120/MWh, with hourly peaks close to €200/MWh. However, the scenario changed radically in the second half of the month. The successive arrival of several storms, accompanied by strong winds, boosted wind generation to record levels, driving daily market prices below €40/MWh and even causing negative prices (-€0.5/MWh) during some time periods.
Wind power sets a historical record and shapes the market. January recorded the highest monthly volume of wind generation since records began, with 8,087 GWh, surpassing the previous maximum reached in March 2018. Wind production was 19.5% higher than the average of the last five years for a January and 6.6% greater than that of the previous year. Thanks to this performance, wind power covered 31.9% of the monthly electricity mix and exceeded 60% of generation in the last week of the month, exerting strong downward pressure on market prices.
Increased demand and greater weight of combined cycles. Despite the strong prominence of wind power, the electricity system had to significantly rely on gas combined cycles (CCG) to meet the increase in demand, which grew by 3.9% in January, partly driven by low temperatures. Even discounting the effect of the weather and labor, demand recorded an increase of 2%. As a result, generation with CCG increased by 18.6%, reaching 4,062 GWh, contributing 16% to the electricity mix. This behaviour reflects the growing dependence of the system on these technologies during periods of high demand and low renewable production.
System costs increase. In parallel, system costs stood at €15.11/MWh in January, 29% more than in the same month last year. This increase is due to the security policy implemented by Red Eléctrica de España (REE) following the blackout in April 2025, aimed at reinforcing system stability through a greater presence of thermal generation.
Signals of opportunity in the futures market. In this context of high volatility in the daily market, the futures market offers a relevant reference for the coming months. The price of electricity for the second quarter of 2026 (Q2-26) in the OMIP market decreased by 9.2% in January, settling at €34.85/MWh. According to the forecasting models of Grupo ASE, these pricing levels are at the lower end of the expected ranges and reflect a scenario that offers industry and businesses the possibility of containing electricity costs next spring, always conditioned by the evolution of climatic and market variables.
Temporary spike in gas in a context of lower reserves. The European gas market recorded a price spike in January compared to December, with the TTF averaging €34.19/MWh, driven by low temperatures and declining storage levels, although it still remains below last year's levels. In Spain, the price of gas (PVB) stood at €35.42/MWh, above the European market, due to temporary limitations in LNG unloading and increased demand. Intense extractions reduced European reserves to 41%, with LNG tanks in Spain around 36% of their capacity, adding pressure to the market during peak consumption episodes.♦