According to data from Red Eléctrica, permits have been requested for 17 GW of batteries in Spain, of which over 9 GW already have grid access permits, and an additional 7 GW are in the process of being processed.

These figures are positive when considering the expected 12 GW by 2030 in the PNIEC. However, only 1 GW of the projects in process is hybridized, while the rest are planned as stand-alone.

Antonio Delgado Rigal, CEO of Aleasoft Energy Forecasting and a Doctor in Artificial Intelligence, emphasizes that “the integration of batteries in renewable energy installations presents a great opportunity for developers, as it helps reduce curtailment and mitigates price cannibalization, thus optimizing profitability and income stability.”

In this context, hybrid projects allow for a more precise adjustment between energy supply and demand from offtakers, making them more attractive for power purchase agreements, strengthening the financial viability of projects.

In an interview with Energía Estratégica España, the executive explains that the reduction in battery costs, which have dropped by 50% in the last year, has been a key factor in the increased profitability of these projects.

Delgado Rigal states that “currently, hybrid systems that already have grid access and a plant balance are more profitable because the CAPEX associated with the battery is reduced,” and he describes how this allows them to benefit from economies of scale and existing infrastructure, increasing their financial attractiveness.

Spain is in the early stages of the storage market growth curve, with a projection of accelerated growth in the coming years, along with the promise of further regulatory development already underway, such as the demand circular and the much-anticipated capacity market, which is expected in the first half of 2025.

This last one is “one of the main factors slowing down the progress of these projects,” according to Aleasoft’s expert, who agrees that this market will be crucial to improve the viability and profitability of storage facilities, as it will offer additional revenue to operators for the availability of capacity in the system.

Main concerns of the sector

Among the concerns affecting the sector, Delgado Rigal highlights the “need for clarity and stability in the regulations governing storage and its integration into the electricity market.”

The lack of certainty regarding potential revenues and financing of these projects adds additional challenges, especially for those investors who view storage as an emerging, high-risk technology.

For Aleasoft, storage is “a strategic vector for achieving a sustainable and efficient energy system.”

Delgado Rigal believes that Spain is at a turning point in the sector’s development: “the past five years have been marked by the development of photovoltaics, while the next five will be dominated by batteries and hybridization.”

In line with this vision, the company has focused on developing forecasting and analysis tools to help clients maximize the value of their storage project investments, ensuring their profitability and long-term sustainability.