Spain increases power grid investment to record levels
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The Spanish Government will invest over 17 billion euros in upgrading the country’s electrical grid between 2025 and 2030, a 30% increase over previous plans.
Vice President Sara Aagesen announced the increased investment and a new “capacity market” designed to prevent power outages. The government received 2,566 public comments on the initial plan and incorporated the feedback, resulting in a larger investment focused on meeting growing demand, particularly from railways, ports, and increased consumption.
The new capacity market, approved by the European Commission in May, will reward companies for ensuring a reliable power supply through both electricity generation and demand management. This system will operate through auctions where participants bid to provide power or reduce consumption when requested by Red Eléctrica de España, the country’s system operator. The auctions will prioritize renewable energy, storage, and demand-side solutions for new investments.
Beyond the capacity market, Spain intends to hold three types of auctions to secure power supply. A main annual auction will allow both existing facilities and new renewable, storage, or demand-response projects to participate. Additional auctions will address short-term needs and bridge the gap until new projects come online. Consumers will fund the new capacity market through variable pricing based on peak demand times.
