Electricity is a commodity and is bought and sold in the open market like any commodity. What makes electricity special is that it must be sold as soon as it has been produced. There is no inventory and no reservation demand for electricity. The supply of electricity in the market is instantly being produced, so it is therefore necessary for not only supply to equal demand, but for actual production to equal demand to maintain the electrical grid. The operation of an electrical grid consists in always balancing supply and demand across the network within very narrow boundaries. This is what went wrong in Spain, as the frequency in the network suddenly fell below the minimum threshold.

Naturally, the operator of a network will be interested in safe, predictable sources of energy to secure a consistent supply (since demand throughout the day is roughly predictable) and to have some marginal sources of electricity that can quickly be switched on and off to deal with unforeseen variations in demand, or with some other unforeseen change. In addition, it is desirable to have some key sources of energy that stabilize or “synchronize” the grid. Nuclear- and coal-powered plants are usually seen as reliable sources that also serve to synchronize the grid, since they have built-in inertia, which automatically counters any sudden changes in frequency. Renewables could, in theory, also serve to synchronize the grid, but they don’t have this role in the European energy market. Large nuclear and coal plants cannot usually increase or decrease their output at a rapid rate, so there is not much immediate backup capacity here. Gas-powered plants on the other hand can, as can renewables, so these sources could serve as backup capacity in the face of large, unforeseen changes in demand or shortfalls of supply from other sources.

Note that the question of maintaining the grid is separate from the question of how much electricity is being generated. All that matters is that production matches demand, and that there are mechanisms in place to balance out unforeseen changes. …

The European energy market is not really a case of socialization. Rather, it is a market of sorts, but one formed by a myriad of interventions. One key intervention that explains the continent-wide integration of grids and the massive growth of the use of renewables is the pricing system. The EU forces operators to accept all the renewable energy that is thrown at them, with the argument that it is the lowest-cost source available. The Spanish Premier Sanchez has dismissed claims that the lack of nuclear power was to blame for the blackout. This is partly correct—blame rests with the politicians and bureaucrats of Brussels and Madrid and their ideological fixation with forcing renewable energy on Europe.

Intervention makes electricity not only very expensive across Europe (a point I’ve not really developed in this article), and it also makes the electrical grids across Europe very fragile. What happened in Spain may be an extreme case, but there’s no reason not to expect many more such cases in the future, so long as renewables are forced on the system in this way.