Energy storage is a key element in the transition towards a more sustainable and flexible energy system, with 12 GW of capacity to be installed by 2030, according to the updated PNIEC. However, the challenges facing its implementation in Spain are considerable.

In an interview with Energía Estratégica España, Miguel Marroquín, Managing Director of Our New Energy and developer of several battery projects in the pipeline, describes that one of the main challenges in implementing batteries is their amortization.

According to the expert, the full payback can be achieved in approximately 20 years, considering the need to replace the lithium cells after a decade.

This replacement is more affordable than the initial installation cost since fixed costs for development, infrastructure, or grid connection do not need to be repaid.

“In the first life cycle, lithium cells lose their energy storage capacity, but the fixed costs have already been paid. You only need to replace the cells, which can extend the lifespan by another 12 years, improving long-term returns,” Marroquín explains.

However, he admits that calculating future costs is complicated. “It’s hard to predict how much a battery will be worth in 10 or 30 years. But by extending its lifespan, financial benefits increase.”

This process is also directly linked to the number of cycles the technology can withstand and how those cycles are managed.

According to Marroquín, batteries have a lifespan of between 9 and 12 years, depending on the number of cycles and usage intensity.

“The battery has a warranty based on the number of cycles and how those cycles are operated. It’s not the same for the battery to go through two cycles a day versus one, or to operate at full charge versus half charge,” he explains.

This operational approach not only influences the durability of the asset but also the profitability of the project.

In fact, efficient management of charge and discharge cycles can extend the battery’s lifespan and improve its financial return.

“For example, we divide the charge into two hours with similar prices to reduce power and minimize battery degradation. This saved cycle can be used in the future when prices are higher,” the specialist describes.

One of the most significant obstacles in the development of storage projects in Spain is the administrative process.

“The process in Spain is completely opaque, the procedures are slow, and information is scarce. This is not exclusive to batteries, but it significantly affects the sector,” comments Marroquín.

Additionally, Spanish regulations lack clear incentives for storage. Compared to other European countries, such as Germany, Denmark, or the United Kingdom, where batteries can generate significant revenue through ancillary services, these markets are not sufficiently developed in Spain.

“There are mechanisms that allow batteries to earn income from primary frequency reserve, something that is not remunerated in Spain,” the expert points out.

This service is crucial in case of system failure, and its absence limits the profitability of the projects.

In this way, Marroquín emphasizes the importance of adopting better practices at the European level so that Spain can take advantage of the potential of storage. “We can learn a lot from other countries that have developed these services in a more transparent and meritocratic way,” he adds.

Hybridization: A Less Profitable Opportunity

The hybridization of batteries with renewable energy plants has been seen as a solution to optimize the use of existing infrastructure and reduce costs.

However, the head of Our New Energy is not convinced that this is the best long-term strategy.

“At first, it might seem cheaper to connect a battery to an existing plant, but the revenue generated over the next 20 years will not be the same as if the battery were placed where it really needs to be,” he argues.

The location of the batteries is crucial to maximize their profitability.

While hybridization allows for the use of infrastructure from an existing solar or wind plant, Marroquín points out that placing the batteries in strategic points of the grid, such as Valencia or Mallorca, could offer greater long-term benefits.

“Mallorca, for example, depends 80% on fossil energy. If it wants to grow in renewables, it will need a flexible resource like storage,” he develops.

This more strategic approach will be crucial to ensuring profitability in a sector where every operational decision has a significant impact.

Building on the knowledge gained from working alongside other expert companies in the storage sector, Marroquín and his team are currently developing around 300 MW of storage capacity across 25 projects located in various regions of the country, including Valencia, Mallorca, and Girona.

“All are in the pipeline, and we hope to build and operate the 300 MW within two years if permits progress,” he states.

The flexibility that batteries offer to store energy and their ability to adapt to the demand of the electrical system will be key to the success of these projects.

However, Marroquín emphasizes that success will largely depend on the speed at which Spain improves its regulation and simplifies administrative processes.