Renewable electricity is associated with wholesale price resilience in sustainable Iberian power markets

Abstract Sustainable electricity transitions are often assessed through emissions and generation shares. Their social and economic viability also depends on how power markets transmit fossil-fuel price shocks. This paper studies the Iberian day-ahead market, where Spain and Portugal combine high renewable penetration, internal market coupling and exposure to the 2021–2023 gas-price shock. Using hourly OMIE prices and Spain-Portugal capacity files, REData and REN generation and demand records, and MIBGAS day-ahead gas prices, we build matched daily samples for 2019–2025. The analysis connects three outcomes that are usually examined separately: wholesale price levels, gas-price pass-through and internal MIBEL price dispersion. Renewable generation is negatively associated with day-ahead prices. The total estimate is −0.987 EUR/MWh per percentage point, while the estimate conditional on gas generation is −0.699 EUR/MWh. Renewable penetration is also associated with weaker within-month gas-price pass-through, with a renewable-gas interaction of −0.438. A four-period check shows a negative interaction before the Iberian Exception, a positive interaction during the formal policy window and a return to a negative interaction after 2023. These estimates describe temporal heterogeneity, not a causal policy effect. Internal Spain-Portugal commercial capacity is associated with narrower hourly absolute price spreads, at −2.924 EUR/MWh per additional GW. The estimates identify conditional associations, not causal effects. They document a price-based pattern under specific market and policy conditions.