Power outage in Spain raises electricity prices even under fixed-price contracts

The blackout, which affected parts of Spain’s electricity grid on 28 April 2025, caused more than just immediate power outages. Its consequences are now also showing up on household and business bills. The grid instability triggered by the incident led to extraordinary measures by transmission system operator Red Eléctrica de España (REE), which in turn pushed up the so-called regulated components of electricity prices.

Although no official report confirming the cause of the blackout has yet been published, one thing is now clear: to maintain grid stability after the blackout, REE had to make greater use of so-called Supplementary System Services (SSCC) and Technical Restrictions (RRTT). These measures involve activating reserve generation capacity or changing the grid’s operating mode outside the regular market (OMIE). They are technically more demanding and, above all, more expensive, because they rely on generation sources that would not otherwise be brought online, often gas-fired power plants with higher operating costs.

Under normal conditions, the costs of SSCC and RRTT make up only a small part of the electricity price. After the outage, however, these components began to rise sharply. While average costs stood at around 12 €/MWh in 2024, they rose to nearly 20 €/MWh in 2025. The increase was even more pronounced in May 2025, when these costs averaged 28,69 €/MWh, up 66 % on the previous year. At their peak, they reached around 35 €/MWh.

Higher prices even under fixed-price contracts

Although regulated components of electricity prices, such as SSCC and RRTT, are not shown separately on bills, they are included in the final price consumers pay for electricity. Another consequence has been a review of electricity suppliers’ contract terms, particularly for fixed-price contracts. Some suppliers have begun warning that they will have to adjust their terms because of “unpredictable system costs,” which in practice could mean higher prices even for contracts that were supposed to offer price stability. Put simply, suppliers are passing the risk associated with problems in the electricity grid on to customers.

The Spanish case shows that technical failures in the transmission system are not isolated incidents: they have a lasting financial impact, including on customers who did not experience an outage themselves. The issue is not only one of reliability, but also the cost of restoring system balance, which is reflected in tariffs.

Moreover, the increased need to use fossil-fuel backup generation runs counter to decarbonisation goals and makes the system more sensitive to gas prices. The situation also raises questions about the transparency of regulated components on electricity bills, as ordinary customers can barely tell what they are actually paying more for.