Spain's Energy Comeback: What the Strait of Hormuz Crisis Is Revealing About Europe's Future Energy System

For much of the past year, Spain has been held up as a cautionary tale for Europe's energy transition. Following the widespread power outage in 2025, critics questioned whether a system increasingly powered by renewables could deliver the reliability modern economies demand. Concerns around grid stability, transmission infrastructure and energy security moved from industry debates into mainstream headlines.

Then came the Strait of Hormuz crisis.

When tensions in the Middle East triggered yet another oil market disruption, Europe once again found itself confronting a familiar vulnerability: dependence on imported fossil fuels. Around a fifth of globally traded oil and LNG typically passes through the Strait of Hormuz¹, making it one of the world's most critical energy chokepoints. When supplies were threatened, energy markets reacted immediately and countries heavily reliant on imported hydrocarbons felt the effects.

Yet amid the volatility, a more nuanced picture emerged. The country many had questioned just months earlier proved to be one of Europe's most resilient.

From reliability concerns to energy resilience

The Spanish blackout exposed genuine challenges within the country's electricity system.

Rapid renewable deployment had outpaced investment in some of the infrastructure needed to support it, highlighting the importance of grid strengthening, flexibility services and interconnection. Those lessons were important and continue to shape investment priorities across Europe.

But the events of 2026 revealed another reality. While Spain's power system may still require further modernisation, its energy mix has become significantly less exposed to geopolitical fuel shocks than many of its European peers.

Much of this can be explained by Spain’s energy mix. Spain generates a growing share of its electricity from domestic renewable resources, particularly solar and wind. Once these assets are operational, they are largely insulated from commodity price volatility and global supply disruptions. Unlike gas-fired generation, sunlight does not need to be imported, transported through geopolitical hotspots or purchased at fluctuating international prices.

This shift is increasingly visible in wholesale electricity markets. The influence of natural gas on Spain's wholesale electricity prices has decreased significantly. In 2021, gas influenced power prices in an estimated 52% of hours, compared with just 9% during the first five months of 2026. The growth of wind and solar generation, which increased by 37% between 2021 and 2025, has been a key driver of this change.²

Why Spain's solar leadership is paying off

For years, investment in solar infrastructure was often framed primarily through the lens of decarbonisation. Today, the investment case looks much broader.

Solar generation provides a hedge against geopolitical uncertainty³. It reduces exposure to imported fuels. It can help stabilise long-term energy costs⁴. And it strengthens domestic resilience during periods of international disruption.

At Foresight, we contribute first hand through our investments across Spain and wider European renewable energy markets. Our solar assets help generate renewable electricity for homes and businesses while contributing to a more diversified and resilient energy system. As geopolitical events continue to create volatility in global energy markets, the value of locally generated power becomes increasingly evident.

The lesson isn't that renewable energy alone guarantees resilience. Rather, that countries with a strong base of domestic renewable generation start from a position of greater strength when global energy supply chains face disruption.

Today, renewables account for about 60% of electricity on the Spanish grid, compared with about 50% across the European Union and one-third globally.⁵ That bold bet has helped to lower Spain’s power bills, which are now cheaper than they were before the latest Middle East conflict or the invasion of Ukraine.⁶ Spain is both ahead of the clean-power curve and one of the fastest-growing major economies in Europe^7,8, demonstrating that deploying green energy at massive scale isn’t at odds with growth.

The next challenge: building for a changing climate

With Spain generating such a high share of its electricity from renewables, particularly in sunny years like this one, storage is essential to help keep the grid stable and flexible. This remains an area where Spain lags behind. According to BloombergNEF, Spain had just 193 MW of installed battery capacity in April 2026⁹ - an extremely modest figure relative to the scale of storage Spain has committed to over the coming years. Spain's updated National Energy and Climate Plan targets 22.5 GW of total storage capacity by 2030, including 12.5 GW of daily and weekly storage and 10 GW of seasonal storage¹⁰.

Energy resilience is about more than renewable development. It requires a stable grid with end-to-end infrastructure to support economies in withstanding unforeseen scenarios.

Countries must therefore consider how renewable generation, storage and grid infrastructure can work together to maintain resilience during periods of geopolitical disruption and wider system stress.

Importantly, and often overlooked, is that storage is important not only for grid stability, but also to integrate renewables, particularly solar, reducing market and technical curtailments¹¹. This helps shift surplus solar and wind generation to non-solar hours, reducing gas demand. It also improves the project economics for investors by maximising renewable energy generation that support robust returns.   

The energy transition enters a new phase

The Strait of Hormuz crisis reinforced a lesson Europe has learned repeatedly over recent years. The energy transition is no longer solely about decarbonisation. It is about resilience.

The countries best positioned to navigate an increasingly uncertain world will be those that can generate and store more of their own energy, reduce reliance on geopolitical chokepoints, modernise their electricity networks and build infrastructure capable of withstanding both market shocks and changing climatic conditions.

Spain's experience offers an important reminder. Last year's headlines focused on what went wrong. This year's energy crisis highlighted what the country got right.

The challenge now is ensuring that renewable generation, grid infrastructure, storage and flexibility solutions continue to evolve together.

Because in the energy systems of the future, resilience will not be measured by how we perform during normal conditions. It will be measured by how we respond when the next crisis arrives.