| ▲ | pyrale 12 hours ago |
| The author's point is that Spain's electricity is very cheap compared to other European countries thanks to its great electricity mix, etc. The reality is that Spain's electricity is cheap because it is relatively insulated from Europe's core network, because its interconnections with other countries are limited. In financial words, there is a spread with the rest of Europe because the ways to arbitrage that spread are extremely limited. If Spain was located near Germany and well interconnected, their prices would look like Germany's. And while cheap energy is pictured by op as a good thing, Spain understands very well that higher prices are good for its renewables industry, and is pressing for more interconnections[1]. The overall tone of the article feels like the author is here to extoll the virtues of renewables. [1]: https://www.ft.com/content/8e94079c-585f-11e4-b331-00144feab... |
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| ▲ | PowerElectronix 8 hours ago | parent | next [-] |
| To add to this, Spain gets it gas from Algeria, the rest of europe gets it from Russia and the middle east. So yeah, It's easy to have better prices when your gas is comparatively free from disruptions. |
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| ▲ | tialaramex 7 hours ago | parent | next [-] | | Sure, Algeria does have gas pipelines to Europe. Two of them actually. The smaller one goes to Spain and Spain as we see in this article has lower electricity wholesale prices. But er, the bigger Algerian pipeline goes to Italy, a country with notoriously high energy prices. So if Algerian gas was the secret that's actually a big problem for you. | |
| ▲ | spiderfarmer 5 hours ago | parent | prev [-] | | Check your facts. |
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| ▲ | maartenscholl 9 hours ago | parent | prev | next [-] |
| This is an interesting point about energy market balancing but it has causality backwards. Spain simply has a better energy mix than Germany, no matter how big the spread between the countries is as a function of interconnectedness. |
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| ▲ | hunterpayne 9 hours ago | parent | next [-] | | The article is a mix of facts and figures on the supply side. However, the real reason for the current cheap prices is the lack of demand. Spain's economy isn't doing well and they have hurt their tourism industry with politics. That's most of the reason for the temporarily cheap power that they mostly import from their neighbor. Being dishonest about their energy policy is pure politics. | | |
| ▲ | cheema33 8 hours ago | parent | next [-] | | > Spain's economy isn't doing well and they have hurt their tourism industry with politics. I don't live in Spain. And this is the first I have heard about their politics keeping tourists away. Can you elaborate? | | |
| ▲ | troad 4 hours ago | parent [-] | | There have been protests against tourism in Spanish cities, esp. Barcelona. As always, the protests are really about local issues (lack of housing, jobs, etc) and foreigners are being scapegoated. A lot of this has a dark edge - e.g. locals spraying water on people that appear foreign to them. The framing around sustainability and 'over-tourism' allows the far left to get in on the xenophobia that's been so useful to the far right. Much easier to attack foreigners than actually come up with solutions to deliver more housing or jobs. Media narratives aside, these incidents have not affected tourism at all. Spain is and continues to be a massive tourism destination, and the average tourist has never even heard of any of this. | | |
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| ▲ | tzs 6 hours ago | parent | prev | next [-] | | How have they hurt tourism? According to the data here [1] tourism has been going up every year since 1996 except for a moderate hit during the 2008 recession and a big hit during COVID. [1] https://en.wikipedia.org/wiki/Tourism_in_Spain | |
| ▲ | throwaway_2626 8 hours ago | parent | prev [-] | | Spain's energy policy could easily be improved, but saying that Spain's economy isn't doing well is disingenuous. In terms of GDP, it's one of the countries with the fastest growth in the EU [1]. Also, our economy is becoming more diversified, precisely thanks to lower energy prices that attract industries that previously gravitated towards Germany and Eastern Europe. [2] I'm curious about how politics have hurt tourism industry, though, if you could elaborate. [1] https://ec.europa.eu/eurostat/web/products-euro-indicators/w...
[2] https://www.reuters.com/world/china/stellantis-chinas-leapmo... | | |
| ▲ | zdragnar 7 hours ago | parent [-] | | It's easy to win the fastest growing award when it has been doing so poorly before. Youth unemployment is at a near twenty year low of 24%, down from recent years around 30%. As for politics hurting tourism, there's some formal policies restricting airbnbs and placing higher tourism related taxes on over-encumbered areas, but I think most of the detraction is the anti-tourism protests from locals, which were quite large in 2024-2025. You'd have to consider local sentiment as "politics" for the statement to really be true, I think. |
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| ▲ | jauntywundrkind 7 hours ago | parent | prev | next [-] | | Spain also has pretty sensible legislation that is somewhat green. For large public areas the lowest allowed AC setting is 27°C / 81°F. Where-as in America you'll go to a mall and it'll be 65°F. https://www.catalannews.com/politics/item/spain-limits-air-c... Probably doesn't make a ton of difference. But I found that very respectable. It made me hopeful they have other basic green sensibilities. | | |
| ▲ | koolba 6 hours ago | parent [-] | | > Spain also has pretty sensible legislation that is somewhat green. For large public areas the lowest allowed AC setting is 27°C / 81°F. As a red blooded American, this is the funniest thing I’ve seen all weekend. | | |
| ▲ | mixmastamyk 3 hours ago | parent [-] | | Sounds good to me. One thing I hate in the summer is being dressed in shorts and t-shirt then going inside and freezing because the AC is on full blast. |
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| ▲ | fleroviumna 9 hours ago | parent | prev [-] | | [dead] |
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| ▲ | miohtama 11 hours ago | parent | prev | next [-] |
| Hmm. Everyone should just disconnect Germany, let them freeze, and enjoy cheap electricity? |
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| ▲ | generic92034 11 hours ago | parent | next [-] | | You forget the times with an overproduction of electrical energy in Germany. Then they sell it for a negative price to the neighbor countries. Later, when they need more energy they buy it back at a premium. It is good business for neighbor countries with enough storage (pumping hydro, etc.). | |
| ▲ | ragebol 11 hours ago | parent | prev | next [-] | | Spain's neighbors could also have lower energy prices with more interconnection to Spain. The whole network diversifies, which would be more beneficial for Europe as a whole. | | |
| ▲ | Leonard_of_Q 11 hours ago | parent | next [-] | | That would raise electricity prices in Spain just like prices in Sweden - which traditionally had low prices - went up with the 'diversification' of the European distribution network. While these price effects were mostly seen in the southern half of the country due to the way Sweden is divided into 4 price regions with most of the interconnects being found in the southern-most region the recently inaugurated 'Aurora' interconnect with Finland caused prices in the north of Sweden to shoot up [1]. [1] https://www.aftonbladet.se/minekonomi/a/Exwx4A/elprissmocka-... | |
| ▲ | pyrale 11 hours ago | parent | prev | next [-] | | The issue is that Spain has three interconnected neighbours (France, Portugal and Morocco) and all of them are overflowing with electricity. The best candidate for lowering prices would be France, but France would most likely re-export that electricity to other countries, and paying to build up the internal grid to carry electricity that is neither bought by nor sold to French actors isn't very attractive. Ideally Spain would interconnect with Italy, but that's more expensive. | | |
| ▲ | crote 10 hours ago | parent [-] | | There has already been a serious proposal for a HVDC cable from Morocco to the UK. If that's possible, why not go for Spain-Germany? | | |
| ▲ | toast0 10 hours ago | parent | next [-] | | Hvdc in the ocean requires way less right of way than hvdc over land. Running oceanic hvdc from Spain to Germany might have some trouble in the English channel where it would be in territorial waters. Spain to UK might make more sense. | |
| ▲ | pyrale 9 hours ago | parent | prev [-] | | Spain has also floated he idea of a HVDC cable to the UK, but it's never happened. Sometimes, headlines are out of control. |
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| ▲ | PowerElectronix 8 hours ago | parent | prev [-] | | France systematicaly refuses to increase the power of their interconect with Spain, as well as to make a gas pipe that would provide cheap Algerian gas to the rest of europe. | | |
| ▲ | pyrale 38 minutes ago | parent [-] | | An interconnection is being built up as we speak. That being said, building new interconnections makes no economic sense for France. The country has no unserved consumers close to the border. That means any electricity imported from Spain would have to be carried further. That involves grid spending paid for by french consumers, without any benefit for them. The same goes for gas pipelines. No one enjoys big infrastructure projects for stuff they don't really need. |
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| ▲ | noprocrasted 11 hours ago | parent | prev | next [-] | | Then you'd have people run extension cords across the border and selling their cheap electricity at inflated prices to their freezing neighbor. | |
| ▲ | pyrale 11 hours ago | parent | prev | next [-] | | That's not my point. My point is that the price spread between EU electricity markets speaks more to the availability of interconnections than to the virtues of one country's electricity mix. The article gets to that conclusion because that's what it was looking for. The one question the article leaves open, but which is pretty relevant, is the question about who should pays for stability services to the grid. | |
| ▲ | mhh__ 11 hours ago | parent | prev | next [-] | | normally when you buy electricity it costs money! | | |
| ▲ | victorbjorklund 10 hours ago | parent [-] | | Many times negative spot prices. | | |
| ▲ | XorNot 8 hours ago | parent [-] | | Which is bad, it's a market and infrastructure failure. Negative prices are to get generators to turn off. A new feature on solar inverters is curtailment mode so they can be remote shutdown when the grid goes negative, since if you're on wholesale energy pricing you'll be charged if you keep driving the grid. |
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| ▲ | izacus 8 hours ago | parent | prev [-] | | [dead] |
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| ▲ | sega_sai 9 hours ago | parent | prev | next [-] |
| It is worth mentioning that the linked FT article supporting the claim is from 12 years ago. |
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| ▲ | 8 hours ago | parent | prev | next [-] |
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| ▲ | mhh__ 11 hours ago | parent | prev | next [-] |
| This is a lesson in how electricity isn't really a commodity e.g. it's very very difficult to send some electrons from one side of the world to another. |
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| ▲ | hn_throwaway_99 11 hours ago | parent | next [-] | | But all commodities are like this. It is actually pretty easy to send some electrons great distances, or heck at least it's a well understood, solved problem. It's just that those interconnections haven't been built yet. Heck, oil is probably the "default" example of what a commodity is, but we're now all acutely aware of what happens when moving that oil from one place to another becomes exceedingly difficult. | | |
| ▲ | pyrale 11 hours ago | parent [-] | | > or heck at least it's a well understood, solved problem. It is not. As a case in my point, Spain had a blackout last year (and I completely believe they are competent professionals - the task is just hard). > It's just that those interconnections haven't been built yet. They haven't been built because the grid isn't just a technical problem. It's also a socioeconomic problem, and adding new interconnections would require finding who needs to pay for it ; and currently, that question has no answer. | | |
| ▲ | 4 hours ago | parent | next [-] | | [deleted] | |
| ▲ | bryanlarsen 10 hours ago | parent | prev [-] | | Hard is relative. Sure, it's hard, but it's a lot simpler problem than something like being able to consume tropical fruit in a temperate country in the middle of winter. The difference of course is that the invisible hand of the market gets that fruit into grocery stores. For various relatively good reasons, power is driven by very visible hands. | | |
| ▲ | pyrale 9 hours ago | parent | next [-] | | > Sure, it's hard, but it's a lot simpler problem than something like being able to consume tropical fruit in a temperate country in the middle of winter. "Brain surgery? Well, that's not exactly rocket science..." | |
| ▲ | gusgus01 5 hours ago | parent | prev [-] | | There are quite a few visible hands driving the fruit industry. Trade agreements, tariffs, water rights, disease/blight controls, and of course weather events/patterns are regularly in the news and discussed as it pertains to the cost and availability of various fruits (and veg). Off the top of my head, we've recently had shortages of fresh strawberries because of weather in California, a shortage of peas because of weather too, and various changes in Trump's tariffs were done to try and alleviate the rising cost of certain fruit and veg. |
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| ▲ | verzali an hour ago | parent | prev | next [-] | | It is actually very easy to move electrons. I only need to get on an aeroplane to move a lot of electrons around. | |
| ▲ | toast0 9 hours ago | parent | prev | next [-] | | Commodities are traded on type, quantity, and place. Oil of a specific grade at a specific port. Pork bellies (no longer traded) of a specific grade in Chicago. Etc. If you want the commodities elsewhere, you have to provide for transportation. Same for electricity. Grids (or grid sections) where supply outpaces local demand and transmission to remote grids can hit negative spot prices even when neighboring grids haven't. | |
| ▲ | pyrale 11 hours ago | parent | prev [-] | | That it is treated as such speaks volumes to the craft of the people designing and maintaining the grid. | | |
| ▲ | mhh__ 11 hours ago | parent [-] | | Unfortunately in Britain at least politicians are absolutely dead set on taking the piss / abusing this by e.g. adding huge amounts of subsidy and stealth taxes into what should be price discovery mechanisms (or for example when was the last time you heard someone talking about how cheap renewables are and discuss the CfD schemes). | | |
| ▲ | tialaramex 8 hours ago | parent [-] | | > when was the last time you heard someone talking about how cheap renewables are and discuss the CfD schemes All the time? Every single HN discussion about this ends mentioning CfD, often as if it's some secret nobody knows about even though the CfD strike prices are often headline news when they're agreed. | | |
| ▲ | mhh__ 8 hours ago | parent [-] | | I've basically only just seen this stuff started to be discussed critically in the media in fairly recent years. not including $work discussions with energy traders. | | |
| ▲ | tialaramex 7 hours ago | parent [-] | | > in fairly recent years Although this financial instrument dates from late last century, its use in energy markets is much newer, the UK began using CfDs for electricity about a decade ago. So, yeah, if you recall conversation about wholesale electricity prices back in 2010 they wouldn't have mentioned CfDs for the same reason they didn't mention the effect of Russia's invasion of Ukraine, it hadn't happened yet. Back then renewable electricity generation schemes were subsidised very differently. |
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| ▲ | try-working 3 hours ago | parent | prev | next [-] |
| This is correct. The price for electricity has been increased by 2x-10x in the Nordics because of the interconnect with Germany. |
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| ▲ | g8oz 8 hours ago | parent | prev | next [-] |
| The relative isolation you cite for power being cheap were true a decade ago when power was expensive. The author is correct in extolling the virtues of renewables. |
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| ▲ | iot_devs 10 hours ago | parent | prev [-] |
| I mean it is hard to argue with the number - I believe everyone will benefit for more interconnections. More energy to Europe, more money to Spain. And for the numbers it seems obvious that renewables are a fundamental part of the picture. |