{"id":81858,"date":"2026-09-07T05:43:11","date_gmt":"2026-09-07T05:43:11","guid":{"rendered":"https:\/\/www.europesays.com\/spain\/81858\/"},"modified":"2026-09-07T05:43:11","modified_gmt":"2026-09-07T05:43:11","slug":"spain-got-a-head-start-on-renewables-now-it-needs-a-battery-revolution","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/spain\/81858\/","title":{"rendered":"Spain Got a Head Start on Renewables \u2014 Now It Needs a Battery Revolution"},"content":{"rendered":"

(Bloomberg) — Spain\u2019s big bet on renewables got started early, if slowly. By the mid-1990s, the industry was still so low-tech that when a turbine blade broke at what was then Spain\u2019s largest wind farm, Jos\u00e9 Manuel Entrecanales would bring in a windsurfer friend to repair it with the same equipment he used to fix surfboards.<\/p>\n

\u201cIt was an extremely rudimentary and artisanal business,\u201d said Entrecanales, now chairman and chief executive officer at Acciona SA, one of Spain\u2019s largest developers of renewable projects. \u201cThe business was barely profitable, but for us, renewables were a business opportunity and a backdoor to access the electricity sector.\u201d<\/p>\n

Today, renewables account for about 60% of electricity on the Spanish grid, compared with about 50% across the European Union and one-third globally. That bold bet has lowered Spain\u2019s power bills \u2014 which are now cheaper than they were before the latest Middle East conflict or the invasion of Ukraine \u2014 and put the country on track to meet its 2030 renewable targets. Spain is both ahead of the clean-power curve and the fastest-growing major economy in Europe, proof that deploying green energy at massive scale isn\u2019t at odds with growth.<\/p>\n

But as the renewables sector matures and a brutal European summer of wildfires and deadly heat waves underscores the energy transition\u2019s urgency, the Spanish model is reaching its limits.\u00a0<\/p>\n

Solar and wind installations can only take the country so far down the path to decarbonization, experts, companies and government officials told Bloomberg News. Massive investment in large batteries and the power grid is also badly needed, and investors and foreign governments are paying close attention to the challenge Spain faces.<\/p>\n

\"\"\/<\/p>\n

Renewable-energy generation this summer is the highest on record, according to provisional data from power grid operator Red El\u00e9ctrica. Surging investment in solar over the past 15 years has created a\u00a0glut of electricity so large that Spain\u2019s energy prices have increasingly fallen\u00a0well below zero during peak times. Solar parks have plummeted in value, leaving investors looking for an exit and\u00a0pushing some developers out of business.<\/p>\n

At the same time, the inherent instability of renewable energy has led to sharp swings in power frequency, contributing to the massive blackout that briefly plunged the Iberian Peninsula into darkness in April last year.\u00a0\u00a0\u00a0<\/p>\n

\"\"\/
\nPhotographer: Brais Lorenzo\/Bloomberg<\/p>\n

Battery storage, and lots of it, can help fix oversupply by absorbing excess solar power during the day and feeding the grid at night. Batteries can also stabilize the grid by releasing stored electricity when power drops, for instance when the weather changes. Unlike the nuclear and gas power plants that currently serve the purpose, batteries need no time to ramp up and can be turned on instantaneously.<\/p>\n

\"\"\/
\nThe Real Toll of Europe’s Heat Wave<\/p>\n

But on this next step of the energy transition, Spain is lagging behind. The country had\u00a0about 400 megawatts of installed battery storage capacity in 2025, according to BloombergNEF. That\u2019s less than 2% of the 22.5 gigawatts the country is targeting by 2030. While BNEF expects installed capacity to more than triple in 2026, with continued growth in the years that follow, delayed regulation and the lack of a capacity market to help ensure energy-supply security\u00a0have so far discouraged investors.\u00a0<\/p>\n

\"\"\/
\nPhotographer: Andrej Ivanov\/Bloomberg<\/p>\n

The government has sped up permitting processes and is subsidizing storage installations, said Joan Groizard, the country\u2019s secretary of state for energy.\u00a0<\/p>\n

\u201cSome changes you don\u2019t see coming until suddenly they\u2019re on top of you \u2014 I think that\u2019s the case with storage in Spain,\u201d Groizard said. \u201cWe\u2019re right at the beginning of an exponential curve that will have a significant path over the next few months.\u201d<\/p>\n

But whether or not red tape is removed, there are still technological limitations, said Patricio \u00c1lvarez, a senior analyst at Bloomberg Intelligence. Large batteries that can store power for two to four hours a day can compete with gas on costs, but longer-term storage is still expensive.\u00a0<\/p>\n

\"\"\/<\/p>\n

\u201cYou can\u2019t fix this problem just with money,\u201d \u00c1lvarez said. \u201cIt needs the technology to get there too.\u201d<\/p>\n

Negative Price Pressure<\/p>\n

The Iberian Peninsula is an energy island, with few power grid links to France and the rest of Europe. That has protected Spain and smaller neighbor Portugal from the recent energy price spikes that have hit much of the region.<\/p>\n

The natural environment has also set the stage for Spain\u2019s renewable ambitions, with plentiful wind and sun, large swaths of empty land on which to build energy projects and a vast network of reservoirs to provide hydropower. Over the past 10 years, the overall economics of clean energy have vastly improved and Spain\u2019s capacity has more than doubled.\u00a0<\/p>\n

\u201cOur electricity mix is more decarbonized than ever and it\u2019s also more competitive on costs,\u201d Groizard said. \u201cWe have gone from having one of Europe\u2019s five highest power bills to one of the lowest, both for homes and industries.\u201d<\/p>\n

\"\"\/<\/p>\n

But while cheap energy is a near-term boon for consumers, low prices are weighing on energy-sector investors.\u00a0<\/p>\n

Prices go into negative territory when the grid is oversupplied, forcing power plants to curtail production.\u00a0The phenomenon isn\u2019t unique to Spain, but the country has had 681 hours of negative power prices this year through Sept. 4, exceeding the number recorded\u00a0in the whole of 2025.<\/p>\n

Larger solar producers generally have long-term contracts that ensure fixed prices, but smaller companies are vulnerable to spot-market volatility. At least four Spanish projects or companies have been offered for sale in recent months, people familiar with the matter told Bloomberg in June.<\/p>\n

Very low prices mean it\u2019s hard to sign long-term power contracts that give investors confidence to keep developing projects, said \u00c1lvarez at Bloomberg Intelligence. \u201cThe signals get distorted,\u201d he said. \u201cInvestors are spooked.\u201d<\/p>\n

Last year\u2019s blackout, the largest in Europe\u2019s recent history, also raised questions of whether the deployment of renewables had gone too far, too fast. More than 50 million people were left without electricity for nearly half a day, taking electronic payment systems offline and closing businesses temporarily.<\/p>\n

While the causes are still being investigated, several preliminary findings indicate that the Spanish grid wasn\u2019t equipped to handle the sudden swings in power frequency coming from solar farms in the country\u2019s south that day.\u00a0<\/p>\n

Grid investment is capped at 0.3% of Spain\u2019s gross domestic product, the lowest spending-to-renewables ratio among EU countries and the UK, according to BNEF. The grid also has little capacity left, meaning new renewable power, battery storage and data center projects are struggling to connect.\u00a0<\/p>\n

These constraints could slow investment and ultimately drive companies elsewhere, said Marta S\u00e1nchez, a partner at EY Spain who leads the firm\u2019s energy-sector work.\u00a0<\/p>\n

\"\"\/
\nPhotographer: Angel Garcia\/Bloomberg<\/p>\n

The government has\u00a0announced it will invest \u20ac13.6 billion ($15.8 billion) in the country\u2019s grid through the end of this decade. The plan will increase the network\u2019s high-voltage capacity 14-fold, allowing industrial projects worth around \u20ac7 billion that are currently halted to go forward, according to government calculations.\u00a0<\/p>\n

\u201cThe lack of grid capacity prevents demand from growing \u2014 if demand doesn\u2019t grow, it limits the deployment of additional renewable energy,\u201d S\u00e1nchez said. \u201cTo continue Spain\u2019s successful rollout of renewable energy, demand needs to keep growing. And to grow demand, we need the grid.\u201d<\/p>\n

Battery Bottlenecks<\/p>\n

Large-scale battery storage can help to smooth out supply, retaining and releasing energy as required. But Spain has long struggled with installing big batteries. Until recently, developers who wanted to add a battery to an existing solar or wind farm \u2014 a straightforward practice in other parts of the world \u2014 needed to go through the permitting process from the start. Slow guidance from the EU on capacity markets has delayed the establishment of a system where large storage can compete with gas and nuclear.\u00a0<\/p>\n

In recent years, the government has given close to \u20ac2 billion under different programs that include assistance to storage systems and made permitting easier, according to energy state secretary Groizard.\u00a0<\/p>\n

\u201cWe are seeing a lot of interest in the sector,\u201d he said. \u201cWe have thousands, literally thousands of megawatts of storage in different phases of approval.\u201d<\/p>\n

Battery businesses that try to take advantage of peaks and troughs in power prices can be profitable as long as the swings in spot markets are sharp, said Entrecanales, the Acciona CEO. While remuneration models are needed to encourage batteries, the more storage in the system, the more stable prices are and the less attractive that model becomes.<\/p>\n

\u201cIf everyone installs them, highs and lows are gone,\u201d Entrecanales said. \u201cIt\u2019s one of the big risks in batteries \u2014 they have an element of cannibalism.\u201d<\/p>\n

And battery technology is still not mature, according to \u00c1lvarez, the Bloomberg Intelligence analyst. The economics are forecast to continue to improve with time and scale, but in most markets, very long-term storage is not yet cheaper than fossil-fuel alternatives.\u00a0<\/p>\n

\u201cThe risk is that batteries don\u2019t become cheap enough to meet those lower power prices in Spain,\u201d\u00a0 \u00c1lvarez said.\u00a0<\/p>\n

Still, firms like Grenergy Renovables SA see opportunity. Founded in 2007, the Madrid-based clean-energy producer initially built some solar projects in Spain before shifting to focus on\u00a0foreign markets. The company once again sees potential at home.\u00a0<\/p>\n

\u201cSpain has a historic opportunity to become an energy island with much more competitive energy than the rest of the continent\u00a0\u2014 but that requires agile permitting,\u201d Grenergy CEO David Ruiz de Andr\u00e9s said. \u201cBatteries at a massive scale will shift the paradigm.\u201d<\/p>\n

The Next Leap<\/p>\n

While Spain is a leader in the rollout of solar and wind, about 25% of its economy is electrified. The rest \u2014 from cars, to boilers in homes, factories and furnaces \u2014 still runs on fossil fuels. The EU\u2019s economy is currently roughly 23% electrified, with a target of 32% electrification by 2030. Turkey, which is hosting this year\u2019s COP31 climate summit, wants countries to agree to a global target of 35% by 2035.\u00a0<\/p>\n

Increased electrification is the next leap in fulfilling the country\u2019s net-zero promise and attempting to slow the pace of global warming. There are positive signs that electricity demand is growing, such as the shift towards decarbonization by Moeve SA, Spain\u2019s oldest private oil company. While the firm still draws most of its profits from fossil fuels, it has sold 70% of its oil-producing assets and introduced an \u20ac8 billion clean-technology investment plan that Moeve CEO Maarten Wetselaar calls \u201ca cornerstone of our transformation strategy.\u201d\u00a0<\/p>\n

\"\"\/
\nPhotographer: Brais Lorenzo\/Bloomberg<\/p>\n

But the risk remains that Spain fails to make the most of its renewables head start, as its economy and infrastructure get battered by the impacts of global warming. This summer, wildfires burned on the outskirts of the Spanish capital, Madrid, while heat has contributed to an estimated 5,000 deaths in the country.<\/p>\n

\u201cElectricity demand needs to be high enough to keep driving both generation investment and also grid investment,\u201d Bloomberg Intelligence\u2019s \u00c1lvarez said.\u00a0<\/p>\n

If electricity demand doesn\u2019t rise fast enough, \u201ccountries with a high renewable penetration rate, like Spain, start to see flaws in the investment signals needed to keep deploying batteries and to keep deploying grid investment.\u201d<\/p>\n

\u00a92026 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — Spain\u2019s big bet on renewables got started early, if slowly. 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