Sunday, February 8, 2026, left a striking image on the European electricity market: Portugal woke up with a virtually symbolic daily wholesale price, while other countries hovered in much higher ranges. On the “day-ahead” price map circulating that day — with data attributed to Energy-Charts and OMIE — the Iberian Peninsula appeared as an anomaly on the continent: Portugal at €0.80/MWh and Spain at €5.92/MWh, compared to France at €76.61/MWh or Ireland at €166.61/MWh.
The debate erupted on LinkedIn following a post by energy consultant Antonio Vidigal, who provided a daily snapshot with data on production and consumption. In his summary, Portugal recorded a consumption of 154 GWh, with notable wind contribution (65 GWh) and a more modest solar output (8 GWh). The post highlighted a key detail to understanding why the Iberian “miracle” isn’t automatically shared across Europe: the interconnection capacity with Spain likely remained limited, in the range of 500–1,500 MW, causing market separation.
This phrase — “markets are once again separating” — is the clue linking the extreme prices with the physical reality of the system. The Iberian market (MIBEL) functions coupled most of the time, but when the available interconnection saturates, the market splitting mechanism is triggered: the flow becomes insufficient to equalize prices, and each zone ends up “setting its own price.” On days of high renewable generation and low demand, this separation magnifies the phenomenon: the local surplus drives prices down to zero (or even negative values), because the system literally needs someone to consume energy.
Vidigal summarized this with a phrase that became headline-worthy: “Lower than this… only zero.” In fact, his post mentioned an intraday minimum price of -€0.4/MWh. This isn’t an isolated anomaly in markets with high renewable penetration — it’s an economic consequence of abundant “cheap” renewable supply (wind and sun) combined with limited capacity to export excess when produced.
What the price doesn’t explain (and why it matters to data centers)
The temptation is immediate: if Portugal and Spain are offering electricity at ridiculously low wholesale prices, then “the real reason” is that the Peninsula is “the place to be” for data center operators. It’s an appealing narrative for social media, but incomplete if taken literally.
The day-ahead price is a signal, not a contract. A data center doesn’t plan multi-million-dollar investments based solely on a cheap Sunday: it needs reliable access to capacity, connection agreements, regulatory guarantees, realistic timelines, and most importantly, a long-term cost structure. Still, the signal matters. A lot.
Firstly, because it reveals abundant renewable energy and a price curve that, under certain conditions, collapses. For the data center industry — especially during a cycle driven by AI, high-performance computing, and 24/7 loads — energy is no longer just an expense; it’s a factor that determines site viability, alongside latency, connectivity, available land, and permits.
Secondly, because it introduces an idea that hyper-scalers and major colocation operators are integrating into their roadmap: flexibility. If the power system experiences hours of surplus, the data center can become a smart consumer: shifting non-critical tasks, scheduling heavy loads when prices drop, and even hybridizing with storage to absorb cheap energy and stabilize its consumption. It’s not just about paying less, but about buying smarter.
The flip side: interconnections and bottlenecks
The same phenomenon that lowers electricity prices in the Peninsula also exposes its structural limitation: the grid doesn’t always allow “selling” that surplus to the rest of Europe. This isn’t minor, because repeated decoupling of the Iberian market is essentially a symptom of congestion.
Meanwhile, the European system has been working for years to expand interconnections. Projects like the Biscay Gulf interconnection between Spain and France aim to significantly increase exchange capacity and reduce precisely these kinds of price divergences. Similarly, technical improvements and capacity auctions in the Iberian axis have been proposed, because without stronger grid infrastructure, the Peninsula risks increasingly frequent episodes of renewable “cannibalization”: high production, plummeting prices, curtailments, or limitations.
For a data center, this translates into a practical truth: cheap energy can coexist with local constraints. This demands careful consideration: specific location, electrical node, connection conditions, real power availability, and grid reinforcement schedules. Looking at a single day map isn’t enough — you must view the system holistically.
Why Spain and Portugal are catching the radar (and what the industry should watch)
Even with caution, interest is real and growing. Sector reports point to a pipeline of new data center capacity in the Peninsula, driven by renewables, digital demand, international cables and connectivity, and a market maturing for large deployments. Against this backdrop, industrial and engineering ecosystem players — like Quark Sener Group, mentioned in the LinkedIn discussion — see a clear opportunity: supporting project landing, from energy design to integration with critical infrastructure.
The lesson from this episode, however, goes beyond excitement: if in less than 24 hours a country can hit €0.80/MWh on average and simultaneously speak of market separation due to interconnection limits, the conclusion is that energy competitiveness won’t be linear. It will be dynamic. And in that dynamic, the winners will be those who know how to turn price signals into strategy: well-structured PPAs, multi-site planning, and designs that tolerate —and leverage— volatility.
Frequently Asked Questions
Why can electricity prices in Portugal and Spain approach €0/MWh or even go negative?
This typically occurs when there’s high renewable generation (especially wind) and relatively low demand. If export capacity is limited by interconnections, the surplus stays within the country and drags down the wholesale price.
What is “market splitting” in the Iberian market (MIBEL), and how does it affect prices?
It’s a mechanism where Spain and Portugal stop sharing a single price when interconnection saturates. Each zone sets its own price based on local supply and demand, which can lead to significant differences during congestion days.
Does the wholesale market price (OMIE/MIBEL) directly influence what a data center pays?
It influences, but isn’t the only component. Data centers typically combine long-term contracts (like renewable PPAs), hedging, and grid tariffs. The day-ahead price is a useful reference, but doesn’t equate to the final supply cost.
Why are hyper-scalers considering Spain and Portugal for new data centers?
Mainly due to increasing renewable availability, options for long-term contracting, connectivity, and the ability to design sustainable infrastructure. However, decisions also depend on local factors like access to capacity, permits, water, land, and grid reinforcement timelines.
via: LinkedIn