From 1 October 2025, the Spanish electricity market will shift from an hourly pricing model to a quarter-hourly system. What does this mean? It means that electricity prices will be set every quarter of an hour, rather than every 60 minutes. This will result in 96 different prices throughout the day.
Why?
This reform stems directly from Europe. The idea is that with this adjustment the tariff will be brought slightly more into line with the reality of production and consumption. In other words, the price will be brought closer to the physical structure of the electricity system.
To begin with, all electricity companies will have to declare how much energy they will produce or consume every quarter of an hour. If they fail to meet the forecast, they face penalties.
How does this affect households?
Residential consumers, in principle, will not see any substantial changes in their bills. The meters found in most households operate on an hourly system, and replacing them with models that account for the 96 daily prices would be not only costly but also logistically complicated.
So, how will the new system be applied to domestic consumption? Red Eléctrica will apply linear interpolation to estimate hourly consumption based on hourly readings. In other words, regulated tariffs will continue to reflect hourly prices. Users in the free market, meanwhile, will see no changes as their contracts typically operate with fixed prices or time-of-use pricing.
Does this measure benefit renewables?
One could say so. Storage facilities and self-consumption, both collective and individual, will be able to adjust consumption and grid feed-in much more effectively, depending on whether prices are lower or higher. The four-hourly system allows consumers with solar rooftops to optimise their consumption and the sale of surplus energy much more effectively during periods of low and high prices.
Furthermore, this system works very well with the roll-out of storage, as batteries (domestic or industrial) will be able to take advantage of periods of lower prices to charge and periods of higher prices to discharge, which improves their forecasting to generate higher revenues and enhance their profitability.
Renewables, both solar and wind, are characterised by their intermittency. That is to say, there are times during the day when wind power output is lower due to a lack of wind, or when photovoltaic generation drops due to cloud cover. The quarter-hourly model is much better suited to this reality, as the market, with 96 daily intervals, captures this variability more clearly. With prices every 15 minutes, production will be matched more efficiently to consumption. Furthermore, the additional costs of balancing markets will be reduced, which ultimately end up inflating the bill.
