Spain Awards Almost $1 Billion for Energy Storage

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)

Summary

Spain is planning to spend 818 million euro (US$956 million) to fast-track its energy storage sector as it seeks to add resilience to the electricity system following a major nationwide blackout last April.

Spain's government has announced 818 million euro (US$956 million) in financial support for 126 energy storage projects designed to strengthen its power supplies. 

The funding and the 126 winning projects were announced by the Ministry for Ecological Transition and the Demographic Challenge (MITECO). They will provide 2.2 gigawatts (GW) of additional power and 9.4 gigawatt-hours (GWh) of storage capacity. The biggest winners were hybrid storage (69 projects) - which combine renewable energy projects like solar/wind with battery storage  - and standalone batteries (39 projects). There was also support for thermal storage (15 projects) and pumped storage (3 projects). Spain has a 2030 target of 22.5 GW of energy storage.

What it Covers and Where

The funding, coming through the European Regional Development Fund (ERDF) offers strong financial support for new energy storage projects, covering up to 85% of the costs for several key project components, including civil works, storage systems, auxiliary equipment, and system integration. Regionally, the big winners were Andalusia, which will host 31 projects, followed by Valencia with 15 and Galicia with 11. Industrial Info is tracking 145 active energy storage projects in Spain worth more than US$13 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports. 

The Blackout

The push for energy storage comes after an unprecedented blackout last April that took out power in Spain and Portugal for up to 24 hours. It was the most serious incident to occur on the European power system in more than 20 years and affected more than 60 million people. After investigation, it was subsequently blamed on insufficient voltage control capacity, a series of planning failures and premature disconnections that worsened the blackout. Alongside greater oversight and grid modernisation, one of the key recommendations was to increase electricity storage capacity and demand-side flexibility.

The Rush for Funding

The call for projects attracted a strong response with 1,750 applications submitted, prompting an almost 17% increase on the original 700 million euro (US$818 million) budget allocation. "The new facilities will contribute to greater flexibility in the electricity system and promote the integration of renewable energies, accelerating decarbonization by ensuring a supply of cheaper, emission-free energy," MITECO stated. The maximum period for carrying out the work will be 36 months from the final granting of the aid, and the work must be completed before December 31, 2029. The new ERDF grants for energy storage complement previous specific support programs implemented by MITECO and the Instituto para la Diversificación y Ahorro de la Energía (IDAE) totalling 730 million euro (US$853 million). Of the 144 successful applications, 124 were battery energy storage systems (BESS), 17 thermal energy storage projects and/or power-to-heat proposals, and three pumped hydro projects. 

Storage a Priority for the European Union

Spain's investment in increased energy storage is mirrored across Europe with the European Commission (EC) outlining its importance last year by announcing changes that will allow more state aid by European Union (EU) countries for energy storage projects, alongside a simpler and faster permitting process. 2024 marked a record year for installations, with 12 GW of capacity added, but according to EU Energy and Housing Commissioner Dan Jørgensen, speaking last year: "We are not moving fast enough." He claimed that storage could help the region deal with three acute issues: independence from Russian fuel, faster energy transition and low competitiveness globally in terms of high energy costs. "Energy storage is a big part of the solution. We need to make sure that the energy from our wind and solar is not wasted. Energy storage can be our safe guarantee for that purpose." 

Key Takeaways

• Spain will invest 818 million euro (US$956 million) to support 126 energy storage projects designed to strengthen its power supplies. 
• Spain has a 2030 target of 22.5 GW of energy storage.
• Industrial Info is tracking 145 active energy storage projects in Spain worth more than US$13 billion.

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IIR News is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resource's Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).