Will Spain expand its energy storage capacity?

Spain is making a major push to expand its energy storage capacity, backed by a significant financial commitment. The European Commission has approved a €699 million ($760 million) state aid scheme to support up to 3.5GW of new storage capacity.

Why is pumping hydro storage important in Spain?

Pumped hydro storage already plays an important role in helping to balance large amounts of renewable energy on the Spanish grid, which as of April 2024 was operating with between 60% and 70% renewable energy penetration. Battery storage, meanwhile, is increasingly being co-located with renewable energy plants to avoid revenue cannibalization.

How will solar generation affect the power supply in Spain?

The prevalence of solar generation - with a strong daily pattern – will affect the capacity and type of power storage needed in Spain. This will be different to other European markets whose low carbon transition are wind & nuclear dominated.

Why are battery storage options more suitable in Spain?

As a result, shorter duration storage options like batteries are more suitable in Spain. In Spain, over 50% of excess renewable energy occurs in periods where there is continuous excess for less than 12 hours i.e. a battery that chooses to charge on this energy would be able to discharge within 12 hours.

When will Spain's electricity market start operating?

Spain’s acting Secretary of State for Energy, Sara Aegesen, said at the time that the market would begin operating mid-2024. The announcement was followed by a European Commission consultation on Spanish electricity market reform, which closed in December.

Should Spain launch a capacity market?

In Spain, the launch of a capacity market would add to favorable tailwinds including massive solar and onshore wind resource and government willingness to drive development of alternative technologies such as marine renewables.