The Iberian market operates as a single market across the Iberian peninsular (Spain and Portugal). Spot market prices are the same across the region for most of the time but may differ for each country if there are contraints on the interconnectors between them. Renewable generation (mainly wind and hydro) represents around half of installed capacity and ~40% of generation
Market Design
How is the market structured?
The Iberian Market has competitive wholesale and retail markets. Physical power is largely sold through a centralised pool (OMIE), although it is not mandatory and generators are able to sell both physical power via bilateral arrangements and financially settled contracts on the futures exchange. Electricity users are free to choose their supplier. Network chares are regulated and passed through by suppliers into the final bill
What are the geographic boundaries of the market?
The Iberian Market covers mainland Spain and Portugal. There are separate regulators, system operators and policymakers that determine local transmission and distribution costs, supply regulations and renewable policy etc in the two jursidictions.
What are the relevant price and delivery zones?
Spot market prices are the same across the Iberian peninsular for most of the time but may differ for each country if there are contraints on the interconnectors between them. Congestion and technicial restrictions are resolved in a specific within-day market and the costs of managing those constraints is recovered uniformly across all users of the system.
Can I buy long-term power in the traded markets?
There are limited OTC and financial contracts traded beyond 2 years
Who do I need to contract with to buy power?
End-users must buy their power from a licenced electricity supplier unless the power is generated on-site.
How are system costs and other social charges levied?
Network charges and other system costs (such as capacity payment costs and legacy renewable supports) are charged to electricity suppliers who pass these through to end users
How do I prove I've bought renewable power?
Across the EU, renewable generation is certified using GoOs (Guarantees of Origin). GoO certificates are issued by the national regulator for every MWh of eligible renewable output.
These certificates are used by suppliers to meet their Fuel Mix Disclosure (FMD) requirements in order to report the average mix of electricity they have bought to supply their customers.
What are the key institutions?
Regulators:
- CNMC (National Commission of Markets and Competition) – Spain
- ERSE (Energy Services Regulatory Authority) – Portugal
Key Government Departments:
- Ministry of Energy, Toursim and the Digital Agenda – Spain
- Ministry of Environment, Spatial Planning and Energy – Portugal
System Operators:
- REE – Spain
- REN – Portugal
Power Exchanges:
- Physical Exchange (OMIE)
- Futures Exchange (OMIP)
- Total Capacity
- Total Generation
