Day-ahead power prices in Spain and Portugal have historically tracked closely, supported by a highly coupled market and strong interconnection. But since April, this relationship has started to unravel. Spanish prices have diverged sharply from Portuguese ones, particularly during peak hours.
The key driver has been a step change in interconnector constraints. Following the 28th April blackout, import capacity from Spain to Portugal was temporarily limited to just 1 GW — around a third of typical levels — as part of a grid “stabilisation process” which has impacted peak-hour price dynamics.
As the chart shows, while off-peak prices remain relatively aligned, Spanish peak prices have fallen below Portuguese levels. The interconnector restrictions have been enforced across peak hours, when Spanish exports would typically surge on the back of low solar-driven prices. With this flow curtailed, Portugal has been forced to clear at higher domestic marginal prices, exposing a price divergence between the two markets during daylight hours. This restriction has since been gradually eased, leading to a restrengthening of the price coupling across the two markets.
