Spain lifts planned grid investment above €17 billion and activates a capacity market

Spain will raise planned investment in its electricity transmission network to more than €17 billion through 2030, about 30% above the €13.6 billion set out in the initial draft and 144% more than the planning framework currently in force, the Ministry for the Ecological Transition said on Wednesday, according to El Correo.

The ministry linked the increase mainly to growth in electricity demand and to new connection requests from industry, housing, transport and renewable energy projects. The revised plan is still going through the approval process and will incorporate changes raised during the public consultation, in which the ministry received 2,566 submissions.

Demand overtakes generation in the connection queue

The mix of requests marks a shift from the previous planning cycle. Demand accounts for 41% of the proposals received, ahead of generation with 40% and storage with 19%. Vice-President and Minister Sara Aagesen said that under the earlier plan access requests were essentially concentrated in renewable generation, while "now there is a huge appetite to electrify: to electrify ports, electrify industries, new industries that want to position themselves in Spain", El Correo reported.

Available grid capacity has become one of the main bottlenecks for the electrification of the Spanish economy. Rising connection requests from industry and large consumers, combined with renewable deployment and new electrification-driven demand, are straining infrastructure that in many places is already close to its limit.

What the revised plan adds

After incorporating the consultation responses, the plan expands across every category of transmission asset:

• Transmission positions serving new demand on distribution networks rise 52%, to 300.
• Positions for direct consumption connected to the transmission grid rise 12%, to 162.
• Positions for rail corridors and port electrification rise 75%, to 59.
• Substations total 193, 17% more than in the initial proposal.
• New lines total 6,706 km, 11% more.
• Existing lines to be uprated total 8,164 km, 6% more.

Capacity market heads for the official gazette

The grid expansion will be accompanied by a capacity market intended to guarantee that energy is available to cover demand in critical situations such as the blackout Spain suffered in April 2025. Aagesen announced that its creation will be published shortly in the Boletín Oficial del Estado.

The mechanism follows years of lobbying by electricity companies and the European Commission's approval in May of the Spanish capacity mechanism under EU state aid rules. Brussels then put the value of the scheme at around €9 billion over ten years, roughly €900 million a year, with the cost borne mainly by electricity supply and weighted towards periods of greatest system stress. The market will be open to generation and storage facilities as well as to consumers and demand aggregators, which will be paid for keeping capacity available to inject electricity into the grid or to cut their consumption when the system operator calls on them.

Technology-neutral, pay-as-bid auctions

Capacity will be awarded through technology-neutral auctions in which participants compete on firm capacity and price. The system will be pay-as-bid, so each winner receives the price it offered. Generation facilities must meet an emissions limit of 550 grams of CO₂ per kilowatt-hour, among other requirements, and cannot receive regulated remuneration. Future projects seeking to take part must be renewables, storage or demand, opening a long-term revenue stream for those assets. Three auction formats are planned: a main auction, an annual adjustment auction and a transitional one. The main auction will allow capacity to be contracted up to five years before the service date and may offer contracts of up to 15 years for new investment, while existing facilities will generally hold one-year contracts and new demand will be able to access terms of between one and ten years.