Sir Francis Drake had tried a new technique in a prior battle with the Spanish. Setting old ships on fire, then using the wind to send them toward enemy ships, had been effective at the Spanish port of Cadiz in 1587.
Drake thought it would work well again during the summer of 1588. The idea was also in keeping with Lord Effingham's orders to assault the Spanish fleet rather than attacking the Armada head-on.
The British used eight old ships, loaded them up with flammable materials, set them on fire and directed them toward the Spanish fleet. Although they failed to set opposing ships ablaze, the fire ships terrified some of the Spaniards.
They broke their crescent formation, despite Medina-Sedonia's explicit orders against it, thereby setting up the fierce battle of Gravelines (off the then-Flemish coast) which occurred the next day. Worse, to get away quickly, they cut their anchors, leaving them without future protection against storms (among other things).
... the Lord Admirall made ready eight of his worst shippes, besmeared with wild-fire, pitch, and rosin, and filled with brimstone and other combustible matter, and sent them downe the winde into the dead of the night under the guiding of Young and Prowse, into the Spanish fleete.
Which when the Spanyards espied approaching towards them, the whole sea being light with the flame thereof, supposing that those incendiary shippes, besides the danger of the fire, were also provided of deadly engins and murdering inventions, they raised a pittifull cry, weighed anchor, cutt their cables, and in a terrible panic feare, with great haste and confusion put to sea.
Amongst which the great Galleasse [a ship with sails and oars, capable of moving with no wind], having broken her rudder, floated up and downe, and the next day fearefully making towards Calys [Calais], ranne aground upon the sands ... (Camden, Annales Rerum Angliae et Hiberniae Regnante Elizabetha, 1588, Section 26)
The August 8th battle of Gravelines was so fierce that both sides effectively exhausted their ammunition. For much of the battle, the Spanish were fighting both the British and the wind which appeared to be pushing Spanish ships into the shoals.
Then, the wind shifted. Philip's ships were able to escape into the North Sea. Although battered, the Armada was effectively undefeated. Bloodied, the Spaniards were unbowed. The official Spanish account expresses relief:
From this desperate peril [the battle at Gravelines] we were saved by God's mercy.
But ... Elizabeth's fleet was also undefeated. Philip's Armada, en route for months to achieve his objectives, did not succeed on this August day.