Market reforms to the electricity sector were first introduced by Royal Decree 78/2004 that took effect in 2005 (the Sector Law). 

Since 2005, competition has largely been achieved by each of the Independent Power Producers (IPPs) competing to secure 15-year Power Purchase Agreements (PPAs) with PWP. These reforms have been extremely successful and are credited with allowing the sector to keep pace with the rapid and significant growth in demand for electricity.

In 2015, further reforms were announced by the Authority for Public Service Regulation (APSR) to increase competition and improve price efficiencies. These reforms included plans to establish a new day-ahead market for wholesale electricity. The aims of the Spot Market initiative include improving the efficiency and transparency of the operation of the electricity sector, providing opportunities for diverse generation sources that do not compete in PWP’s normal P(W)PA tender process, and providing an option for the continued participation of existing generation plants whose P(W)PAs have expired.