This was the message Spanish Prime Minister Pedro Sánchez delivered to the media on March 14, in the middle of the surge in European spot electricity prices, driven by the Iran conflict (on this topic, we discussed energy price volatility in Europe here).

That same day, Sánchez pointed out that Spain was paying around €14/MWh, while countries like Italy, Germany, and France were above €100/MWh: a gap he attributed to Spain’s strong reliance on renewables.

In 2025, the EU reached a significant milestone: renewables accounted for 47.3% of total electricity generation, according to Eurostat. This confirms steady progress and reinforces Europe’s position as a global leader in clean energy.

However, behind this headline figure lies a more nuanced reality, characterized by structural constraints, uneven progress, and increasing system complexity.

A system driven by wind and solar

The most relevant insight is not just overall growth, but the transformation of the energy mix.

In 2025:

• wind power confirmed its position as the leading renewable source, accounting for 37.5%
• solar energy expanded rapidly, reaching 27.5%
• hydropower declined to 25.9%, affected by unfavorable weather conditions

The most significant factor is the pace of growth: photovoltaic energy is the fastest-growing source, with a +24.6% year-on-year increase, driven in part by supportive incentive schemes and its versatility.

This points to a now structural trend: Renewable growth is increasingly driven by modular, fast-deploy technologies that can scale quickly and flexibly across markets.

EU: Strong Performance uneven distribution

The European average on share of energy from renewable sources hides significant disparities across countries.

Leading nations such as Denmark, Austria and Portugal generate the vast majority of their electricity from renewables, in some cases exceeding 80%.

Meanwhile, other countries remain significantly below the EU average.

This uneven pace creates structural consequences like price volatility across interconnected markets, imbalances in industrial energy costs and continued reliance on cross-border electricity flows

Italy: aligned, but not leading

Italy’s performance in 2025 is broadly in line with the European average. According to Eurostat data, renewables accounted for around 47-48% of electricity generation in Italy, slightly above the EU average.

However, this result needs to be contextualized. While electricity generation shows strong progress: the share of renewables in total final energy consumption remains significantly lower; the country still relies on imports and fossil fuels for system balance.

In other words: Italy performs well in power generation, but lags in overall energy system decarbonization. It is also still far from the extreme negative price dynamics observed in markets such as Finland, where in 2023 electricity prices fell below zero for hundreds of hours, reflecting structural oversupply conditions due to the great generation of energy thanks to renewables.

Implications for energy markets

For energy players, this evolving landscape carries clear and increasingly strategic implications. First, volatility is no longer an exception but a structural feature of European energy markets: the growing penetration of intermittent renewable sources such as wind and solar continues to amplify price variability, particularly in short-term and spot markets. At the same time, flexibility is becoming a critical asset. Solutions such as energy storage, demand response, and grid optimization are no longer optional enhancements, but essential components to ensure system stability and efficiency.

Crucially, avoiding grid congestion is becoming a top priority, as demonstrated by what is currently happening in the Netherlands—one of Europe’s most advanced renewable markets—where insufficient grid capacity has turned into a major bottleneck, delaying new connections and slowing down the energy transition. In some cases, thousands of projects and industrial users are waiting to connect to the grid, highlighting how infrastructure constraints can directly limit renewable deployment.

As a result, investment priorities are shifting. Future value creation will not be driven by generation capacity alone, but by the ability to integrate and manage energy systems—through resilient grid infrastructure, scalable storage solutions, and advanced energy management technologies.

At the same time, the broader direction remains clear: renewables are not just an option, but the inevitable future of the energy system. Reducing dependence on fossil fuels—whose prices are deeply exposed to geopolitical risks beyond any operator’s control—is becoming essential not only for decarbonization, but also for long-term market stability and energy security.