Power Play: Flexible Generators Stand to Benefit From Portugal's Restrictions on Spanish Electricity Imports

The aftershocks of the Iberian Peninsula blackout on 28 April 2025 are continuing to play out. This commentary looks at the impact of Portugal's restrictions on electricity imports from Spain on Portuguese energy producers.

Key highlights include
-- Portugal's grid operator decided to temporarily restrict electricity imports from Spain, sparking an unusual price differential between the two countries.
-- Recent generation data suggest that hydropower, and to a lesser extent gas-fired electricity generation, have contributed to bridging the gap.
-- Operators with a high proportion of flexible generation such as Energias de Portugal stand to benefit the most from future disruptions and volatility.

"Over a short period of time, both the price divergence and the need for flexible generation such as hydropower or gas-fired power plants should not have an outsized impact on power producers in the region", said Amaury Baudouin, Senior Vice President, European Corporate Ratings, Diversified Industries & Energy. "However, over an extended period of time, price volatility and shortfalls in volumes caused by a reduction in imports may benefit some producers, particularly those with a large, flexible generation capacity."