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The international situation has once again placed the spotlight on the energy market. When geopolitical tensions arise affecting oil or gas, markets react immediately, and consumers can notice it on their bills. But what real impact could the war in Iran have on the price of electricity in Spain?
Will there be price hikes on the bill?
The answer is yes, but not for all consumers.
Over eight million households are on the Voluntary Price for the Small Consumer (PVPC), the regulated tariff that updates its price partly based on the electricity market each day. This means that any fluctuation in the price of gas on international markets can quickly be passed on to these bills.
This impact has been mitigated since 1 January 2026, thanks to the new methodology for calculating the regulated tariff, which combines 45% of the price from the day-ahead market and 55% from forward markets.
This hybrid system significantly reduces volatility: more than half the price no longer depends on gas fluctuations and instead relies on more stable signals from futures markets, making the current PVPC notably less vulnerable to geopolitical tensions such as the conflict in Iran.
Free market customers, on the other hand, do not usually experience immediate variations, as their tariffs remain stable for the duration of their contract (usually one year).
Government measures to reduce the impact on electricity bills
In this context, the Government has approved a Royal Decree introducing urgent measures to reduce the impact of rising energy prices on households and businesses.
The plan includes tax measures such as a reduction in VAT on electricity, the temporary suspension of the Tax on the Value of Electricity Production (IVPEE), and a reduction in the Special Electricity Tax (IEE).
In addition, electricity network charges for electro-intensive industries have been reduced.
On the other hand, electrification and self-consumption are being promoted through tax deductions and financial support for renewable installations.
The measures entered into force on 22 March 2026 and must be ratified by Parliament.
How does the war in Iran affect the price of electricity in Spain?
Spain does not depend directly on Iran for its energy supply, but it is part of a global market where prices are influenced by the availability and transport of raw materials.
According to official data from CORES (Corporation of Strategic Reserves of Oil Products), in 2025 Spain imported gas primarily from Algeria (34.6%), the United States (30%), Russia (11.5%), Nigeria (7.3%), and Qatar (1.7%).
Although Iran does not play a prominent role in Spanish supply, it does influence a critical chokepoint: the Strait of Hormuz, through which an essential part of global oil and gas trade passes.
Geopolitical instability causes tension in the European gas market (the most relevant being the Dutch TTF), and this affects gas prices in Spain.
The International Energy Agency (IEA) warns that if the tension continues, Europe could face a rise in gas prices in “days or weeks”, due to the need to compete with Asian countries for LNG shipments.
Impact of gas on the Spanish electricity system
To understand why an international crisis can affect the price of electricity, it is essential to understand how the electricity market works in Spain.
In our country, electricity is purchased through a marginal pricing system:
- Different technologies are used to meet demand.
- The last plant to come online – usually the combined cycle plants, which use natural gas – determines the final price for all the others.
Thus, when the price of gas goes up, the price of electricity goes up, even if a large part of the daily energy comes from renewable or nuclear sources.
Data from the Electricity System Report by Red Eléctrica de España (REE) reinforces this idea: the day-ahead and intraday markets account for around 84.7% of the final energy price.
Lessons learned from the war in Ukraine
The energy crisis stemming from the invasion of Ukraine in 2022 highlighted how sensitive prices can be to international tensions.
The war in Ukraine taught us a very clear lesson:
- When Russia reduced gas supply to Europe, wholesale prices skyrocketed.
- Spain was not particularly dependent on Russia, but the European market was, and that directly affected our costs.
- In 2022, historic peaks were recorded, with immediate repercussions on regulated bills.
The current situation is not identical, but it is comparable: once again, a geopolitical conflict is creating market tension and highlighting Europe’s vulnerability to imported raw materials.
At that time, it was necessary to release strategic reserves to stabilise markets and prevent further pressure on gas prices. The situation in the Middle East could generate similar pressures if the crisis affects shipping routes or global supply.
A matter of energy dependence
The Energy Balance of Spain, prepared by MITECO (Ministry for the Ecological Transition and the Demographic Challenge), confirms that our country still depends heavily on imported raw materials to meet its energy demand, especially oil and gas.
This dependence means that, even if suppliers are not the countries directly affected by the conflict, Spain may still suffer the consequences of a more strained global energy market.
The long-term solution: more renewable energy
Despite the international impact, Spain has a strategic advantage: its growing renewable capacity.
According to REE data, renewable generation already represents a substantial share of the European energy mix, reaching 48.4% of electricity generated in the ENTSO-E area in 2024 (the European Network of Transmission System Operators for Electricity).
In Spain, renewable production in 2024 accounted for 56.8% of the national mix, 59.0% on the peninsula, driven by the recovery of hydropower (+35.5%) and solar photovoltaic generation (+18.8%).
Each MWh generated with solar, wind or hydropower:
- Reduces the need to burn gas.
- Decreases exposure to international crises.
- Provides supply security.
- Contributes to energy autonomy.
The greater the share of renewables, the lower the impact on electricity bills derived from global conflicts. In addition to being domestic energy, it is clean energy, contributing to the decarbonisation of the economy.
Electrifying final energy consumption in transport (oil), residential industry and services (natural gas) is key to advancing decarbonisation and energy independence.
In conclusion:
- Yes, electricity bills are likely to rise, but only for those on PVPC, as this tariff directly reflects market prices.
- Spain does not depend on Iran, but it does depend on the global gas market, which is affected by the conflict.
- The marginal pricing system means that the price of gas determines the final electricity price in many hours.
- Energy dependence on imported raw materials makes Spain sensitive to international crises.
- Renewable energy is the strongest tool to reduce that dependence and provide more stable prices in the long term.