Electricity market in Spain: main players

The electricity market in Spain has four main activities:

  1. Power Generation
    • It is responsible for the production of electricity power
    • The Power Generation sell the electricity through two ways:
      1. Wholesale market: where electricity is sold for the short and long terms
        1. Electricity pool (daily purchases)
          • Allows buying electricity power on the same day
          • Works in a similar way to the stock exchange in which prices are set by the offer and demand
        2. Futures (electricity purchases for the future):
          • Allow buying electricity in advance for the upcoming days, weeks, months, quarters and years
      2. Bilateral contracts with Energy Retailers
        • Power generation companies sell the electricity directly to Energy Retailers
    • Types of electricity generation plants:
      1. Nuclear
      2. Coal
      3. Natural Gas
      4. Hydro
      5. Wind
  1. Transmission and Distribution
    • Responsible for the transmission/distribution of electricity power in high voltage (transmission) and low voltage (distribution)
    • Red Eléctrica de España (REE) for transmission and distribution companies are the sole owners of the network
    • Thus, being a monopoly, the Government sets the annual retribution through the access tariffs
  2. Energy Retail
    • Sell electricity power to final consumers
    • Two types of Energy Retailers:
      1. Retailers in the liberalized market
        • Supply electricity at the tariffs defined by themselves
      2. Reference Retailers
        • Designated by the Government to offer the Voluntary Price for the Small Consumer (Precio Voluntario para el Pequeño Consumidor) and the Last Resource Tariff (Tarifa de Último Recurso) whose prices are defined by the Industry Ministry
  3. Consumers
    • Final consumers of electricity
    • Free to choose the supply of electricity from any Energy Retailer