The deployment of battery storage systems in Spain is at a critical juncture. Despite having more than 8 GW of storage capacity, primarily from hydroelectric pumped storage, the country needs to incorporate nearly 14 additional GW by 2030 to meet the targets of the National Integrated Energy and Climate Plan (PNIEC).

However, a limited regulatory framework and the lack of economic incentives have stalled the growth of this key technology, as highlighted in a new report from Our New Energy.

Spain faces a structural problem: access to electricity markets for batteries is restricted, limiting them almost exclusively to participation in the adjustment market, in the secondary band.

This contrasts with countries like Sweden, where batteries can operate in up to seven adjustment markets, or Belgium, with five.

“The numbers add up, but the Spanish system does not recognize the full value of batteries,” says Miguel Marroquín, General Director of Our New Energy.

In an interview with Energía Estratégica España, he states that the problem is not technical profitability, but the lack of a proper market design that allows batteries to participate in key services such as primary and tertiary regulation.

“In Belgium, a battery installed today can recover its investment in six months. In Sweden, in less than a year. These examples demonstrate the real value of storage when competitive markets are designed,” Marroquín highlights.

He also adds that administrative processes in Spain are long and complex, which discourages foreign investment and national development.

The Our New Energy report emphasizes that regulation in Spain continues to treat batteries like conventional generators, limiting their potential.

Moreover, direct competition with renewables in existing markets, such as the secondary regulation market, generates economic distortions.

This outdated framework does not reflect the real capabilities of batteries to stabilize the grid, prevent energy spills, and reduce price volatility.

In contrast, in Spain, although there are over 14 GW of battery projects seeking grid access, only 11 MW are operational in distribution networks.

The models implemented in other European countries offer valuable lessons for Spain:

• Sweden and Belgium: Diversified markets allow batteries to generate income from multiple adjustment services, encouraging their rapid deployment.
• United Kingdom: Capacity auctions and simplified permitting processes have led to an operational storage capacity of 4.7 GW.
• Italy: Long-term contracts through competitive auctions have proven effective in securing economic stability for developers.

Marroquín emphasizes that these experiences show that there is no need to reinvent the wheel: “If Spain wants to lead in storage, it’s enough to adopt the models that already work in Europe and adapt them to our needs.”

To overcome the current barriers, Our New Energy proposes several measures:

• Primary and tertiary regulation markets: Introducing these markets would increase income opportunities for batteries and better reflect their capabilities.
• Streamlining administrative processes: A single-window system and shorter approval timelines would reduce the approval time for new projects.
• Clear economic incentives: Direct subsidies, tax exemptions, and a support framework for hybrid battery and renewable projects.
• Redesign of grid access: Allow modern technical criteria that guarantee the incorporation of batteries at a large scale.

Energy storage is a strategic necessity to consolidate the energy transition in Spain.

However, the country needs a profound change in its regulatory and economic framework to fully leverage its renewable potential.

“Storage is key not only to ensure the stability of the electricity system but also to accelerate the path to a cleaner and more sustainable future,” concludes Marroquín.