The European energy sector is facing a particularly challenging situation, characterised by high geopolitical tension, volatility in international markets and a growing debate over the energy model that must ensure both security of supply and economic competitiveness, whilst driving progress towards decarbonisation.
The recent energy crisis stemming from tensions in the Middle East and the conflict in Iran, exacerbated by the closure of the Strait of Hormuz, has highlighted the vulnerability of global markets. Although the logistical impact has been more severe in certain regions, the effect on prices has been felt worldwide.
Throughout 2025 and the first half of 2026, international energy markets have followed a trend that has unfolded in two distinct phases: a downward trend in 2025, and a sharp rise in volatility in 2026, linked mainly to geopolitical tensions in the Middle East and uncertainty surrounding supply routes.
In the crude oil market, in 2025 Brent fell from levels close to $80 per barrel to around $62 at the close of the year. This drop was due to increased production outside OPEC and a slowdown in Chinese demand. However, in 2026, as a result of the conflict in the Middle East, there was a sharp rise: in April, the price of Brent exceeded $115. Following agreements to restore supply, the market has rebalanced. Today, the price stands at around $74.
As for European natural gas, the TTF index also dropped during 2025, due to high storage levels, reaching lows of €28/MWh. In 2026, the temporary closure of the Strait of Hormuz and the disruption to LNG production in Qatar increased market volatility, although the resolution of the conflict in June 2026 has allowed prices to stabilise. By the end of that month, European gas was trading at around €43/MWh, with prospects of stabilising in the €30–45/MWh range.
In Spain, MIBGAS mirrored international volatility, although it maintained a competitive position vis-à-vis the TTF, thanks to its regasification capacity and the operation of the Iberian market. After closing 2025 at levels of €28–30/MWh, the price rallied in 2026 up to €51–53/MWh due to uncertainty over LNG supplies. Subsequently, following the declaration of a ceasefire in Iran in June 2026, prices underwent a correction to around €42/MWh, with the futures curve pointing to stability at around €40–42/MWh for the remainder of the year.
Overall, the gradual stabilisation of international markets should lead to a gradual moderation in energy prices and help to ease inflationary pressures in the coming months.
In this context, it is necessary to recognise that, despite the significant growth in renewable energy, a very substantial part of global energy consumption continues to depend on fossil fuels. This reality highlights that the complete and swift replacement of fossil fuels is not a viable option in the short term. The energy transition must therefore be approached from a realistic and orderly perspective, in a way that is compatible with economic and social development.
European energy policy must focus not only on securing supply, but also on maintaining the European Union’s central role in the economic and industrial spheres on the global stage. Europe’s decline in relative importance in terms of global GDP reflects, amongst other factors, the impact of a regulatory framework that has prioritised decarbonisation without giving sufficient consideration to its effects on industry, energy costs and the ability to attract investment.
In the case of Spain, the country has an energy system and infrastructure that enable it to cope with the impacts of global shocks from a comparatively more resilient position, as demonstrated during the conflict in the Middle East. This strength helps to ensure security of supply and to sustain strategic sectors of the national economy, such as tourism, transport and industrial activity.
To move towards genuine strategic autonomy, it is essential to encourage investment in all technologies that help to strengthen energy security. Energy and industrial policies must provide regulatory certainty and long-term stability, so that investment decisions regarding critical infrastructure do not depend solely on the emergence of short-term geopolitical crises.
First and foremost among the main challenges facing the sector is security of supply. Source diversification, the maintenance of strategic capacities and the rigorous assessment of viable alternatives must be fundamental pillars of public policy. Energy autonomy should not be viewed as an isolated objective, but as a necessary condition for growth, stability and competitiveness.
Secondly, Europe faces a crucial challenge in terms of industrial competitiveness. Energy is an essential factor for industry and services, and prices that are structurally higher than those in other regions can lead to a decline in economic activity, offshoring and job losses. Consequently, the regulatory framework must support energy-intensive industries that are fundamental to economic and social well-being, whilst promoting low-carbon technologies.
Thirdly, the energy transition must be carried out in a gradual, technically feasible manner that enjoys social acceptance. Ignoring the impact of costs on households and businesses may lead to public opposition to climate policies and hinder the achievement of decarbonisation targets. It is therefore necessary to combine environmental ambition with economic pragmatism and security of supply.
In this process, renewable gases, such as biomethane and hydrogen, must play a significant role, particularly in sectors that are difficult to electrify. These solutions make it possible to reduce emissions in the short term, make use of existing infrastructure — in particular, gas distribution networks — and generate opportunities linked to circular economy, waste utilisation, the development of the primary sector and the creation of jobs.
In short, Europe needs a balanced energy strategy that combines security of supply, industrial competitiveness and environmental sustainability. To this end, it is essential to devise stable, technology-neutral and investment-oriented policies capable of driving a realistic and orderly energy transition that is compatible with economic growth and social cohesion.
Europe needs a balanced energy strategy that combines security of supply, industrial competitiveness and environmental sustainability
The main challenge facing the natural gas and renewable gases sector lies in climate policy legislation, both in Europe and in Spain. Regulatory developments in the gas sector must address issues such as the diversification of supply sources and the reduction of dependencies through the accelerated development of green gases such as biomethane and hydrogen, as well as the maintenance of infrastructure.
In the case of Spain, the remuneration model, which remains in force until 2026, is in its final stage of implementation. Consequently, during the 2025 financial year, there has been intense activity both in relation to the evaluation of the current regulatory period (2PR 2020–2026) and regarding measures aimed at initiating a discussion and analysis of the principles and criteria for the third regulatory period (3PR 2027–2032). This is undoubtedly shaped by the context of transition involved in meeting the decarbonisation and energy transition targets.
At the start of the year, the Spanish National Commission for Markets and Competition (CNMC) published the timetable of regulatory Circular letters scheduled for processing in 2025, which prompted a range of reviews, analyses and proposals regarding the main elements of the remuneration and tariff framework.
As regards the second regulatory period, in 2025 the CNMC published the draft specific report assessing gas distribution activity (2PR) (RAP/DE/026/25). This report provides a key analysis for identifying the strengths of the current model and areas for improvement in the new regulatory framework.
In its draft Circular letters for the third regulatory period (2027–2032), the CNMC has taken into account the energy policy guidelines set out by the Ministry for the Ecological Transition and the Demographic Challenge in 2025. In these guidelines, the proposed methodologies for remuneration in the distribution and transmission sectors prioritise decarbonisation and the uptake of renewable gases.
As for key regulatory developments, it is worth noting the publication by the CNMC of the public consultation on the review of the remuneration methodology for natural gas distribution. This will form the basis for the new regulatory framework. This consultation opens up the discussion to the adjustment of the current remuneration model, which has operated against a backdrop of extraordinary geopolitical circumstances, soaring international prices and inflationary conditions. All of this must be taken into account when addressing the challenges posed by the global environment. With a focus on the transition and digitalisation, the new remuneration framework should promote renewable gases, as well as seek incentives for investment in digital technologies.
As for key regulatory developments, it is worth noting the publication by the CNMC of the public consultation on the review of the remuneration methodology for natural gas distribution
In any case, we must all contribute to the creation of a regulatory framework model for the distribution of natural gas that aims to ensure stability alongside an appropriate and reasonable rate of return for the system as a whole.
Since late 2025 and throughout the first few months of 2026, intensive work has been carried out in collaboration with the CNMC, following a process of public hearings and submissions, on the proposed remuneration methodology for the new period. The basis for this work is a model that builds on the current methodology and incorporates incentives for the development of renewable gases and the digitalisation of the networks.
The gas network deployed across Spain is a strategic piece of infrastructure that adds value to the energy system as a whole and helps to meet the energy needs of households, industries and businesses efficiently
The gas network deployed in Spain is a strategic piece of infrastructure that adds value to the energy system as a whole and helps to meet the energy needs of households, industries and businesses efficiently. It is a safe, well-established option that is capable of adapting to the current challenges posed by the energy transition. Furthermore, our gas network is ready to integrate renewable gases and helps to strengthen the resilience and robustness of the Spanish energy system as a whole.
Within this distribution network, Madrileña Red de Gas stands out as a growing company, committed to innovation and leadership. By 2025, we had reached over one million customers (906,000 supply points), with growth rates exceeding those of the rest of the sector, a network length of 6,179 km and a presence in 61 municipalities in the Community of Madrid.
Madrileña Red de Gas stands out as a growing company, committed to innovation and leadership. By 2025, we had reached over one million customers (906,000 supply points), with growth rates exceeding those of the rest of the sector
In terms of sustainability, we remain committed to the initiatives set out in our 2023–2026 Sustainability Master Plan. In the last financial year, the company once again reaffirmed its sector leadership in Spain by achieving the highest possible rating in the Global Real Estate Sustainability Benchmark (GRESB) assessment: 100 points out of 100.
This recognition consolidates our leadership and demonstrates that Madrileña Red de Gas’s management model is sound, consistent and in line with the wider context. Once again this year, our commitment to responsible, transparent management focused on generating a positive impact has been reaffirmed, making sustainability a strategic pillar of our business model.
As part of our growth strategy, we are working to extend the gas distribution network to new municipalities in the province of Madrid. In line with this, over the last few years we have launched natural gas distribution in Casarrubuelos and Miraflores de la Sierra. We are continuing our work in Los Molinos, Moralzarzal and Soto del Real. In addition to these ongoing projects, we are also taking steps to expand into the municipality of El Boalo.
In light of all of the above, I would like to express my appreciation to the team at Madrileña Red de Gas for their dedication, professionalism and commitment throughout this financial year, as well as for enthusiastically sharing our vision for the future.
I would also like to thank everyone at Madrileña Red de Gas for the trust they have placed in me and the support they have given me since I took on the role of chair of the company, now more than a year ago. I wish to reiterate my gratitude to the shareholders and express my commitment to growing the business and supporting the development strategy over the coming years.
On behalf of Madrileña Red de Gas, I would like to express my gratitude to our customers, suppliers and partners, whose trust and support have been essential in enabling us to continue making progress towards our goals.
To all of you, thank you for making the consolidation and growth of Madrileña Red de Gas possible.
Carmen Gómez de Barreda
Chairwoman