During his role as moderator of Panel 5, “Storage and asset management: vectors for strengthening energy security”, at FES Iberia 2025, Chema Zabala, Managing Director at Alantra Energy Transition, delivered a sharp assessment of the current status and outlook for energy storage in Spain. Unlike emerging technologies still undergoing validation, storage is already technically viable and well-positioned, with over 25 GW of projects granted grid access and connection. However, that potential has not yet materialised due to structural delays in the administrative and regulatory processes.

“Storage is not something that has suddenly appeared… for over five years now, it has been a technology we can start developing,” states Zabala. He clarified that the current situation is not due to a lack of investor interest but rather to the fact that project development cycles in Spain typically take four to five years. According to his forecast, the first large-scale storage facilities will be operational by 2026, signalling the end of a long preparatory phase.

Beyond technical timelines, Zabala emphasised the economic burden Spain is incurring by not yet having operational storage systems. “Integrating renewables in Spain is costing €1.5 billion in balancing services in 2024, technical constraints surpassed €2.5 billion last year, and this year we’re likely to hit €5 billion,” he warned.

This situation reveals growing operational inefficiencies in the grid as renewables expand. When production surpluses occur, the system is unable to absorb or store the excess, leading to avoidable technical and financial losses. In Zabala’s view, the lack of flexibility not only affects energy optimisation but also generates unsustainable structural costs.

Zabala also highlighted what he described as “structural sprezzatura”—a persistent mismatch in the energy market. This year, Spain has seen up to €90/MWh differences between daily maximum and minimum prices, creating an arbitrage window that, in theory, would make storage highly profitable. “This makes it possible to develop storage on a widespread basis, at least up to a certain level,” he explained.

However, he also warned that this favourable spread will not last forever. “The question about this entire development… is whether this market exists for everyone,” he added. As more operators enter the space, there is a real risk of revenue cannibalisation, a pattern already seen in the solar PV sector. In other words, the economics work best for early movers, but are unlikely to scale linearly.

Regulatory uncertainty and investment risk

Zabala stressed that regulatory ambiguity is now the main bottleneck holding back deployment. He underscored expectations surrounding the upcoming Royal Decree-Law, expected to be approved “tomorrow” at the time of the panel. “We are waiting for the Royal Decree-Law to be approved tomorrow,” he stated.

For Zabala, such regulation is critical not just to provide certainty but to improve bankability, which is essential to attract large-scale institutional capital. Without a clear and stable legal framework, investors are hesitant, and the market remains fragile.

He also pointed out that balancing markets, which should, in theory, provide alternative revenue streams for storage, are already saturated. “Renewables have already cannibalised price signals in the secondary band and the patterns. These now look very attractive for another technology—storage,” he explained, suggesting that even complementary services are becoming less reliable for project viability.

A window Spain cannot afford to miss

Zabala’s message was clear: storage is not optional—it is essential to the security and flexibility of the Spanish energy system. The country already faces soaring costs from technical restrictions and balancing services, while a massive portfolio of projects sits on standby due to regulatory inertia.

The broader regulatory context has recently become even more volatile following the repeal of Royal Decree-Law 7/2025, as reported by Strategic Energy, further deepening doubts about Spain’s policy consistency. For Zabala, this is a pivotal moment: “There’s a highly attractive market for the first projects that manage to connect,” he affirmed.

However, this opportunity won’t last forever. Spain already has the technology, the investors and the urgency. Now it needs the rules to match.

Watch the full panel: