The energy transition in Spain faces structural challenges. According to Pablo Corredoira, partner at Haz Energía, the combination of excess generation at specific times with an increasing share of solar energy and the lack of regulation for energy storage is compromising the financing and development of renewable projects.

“Currently, Spain has more than 27 GW of installed photovoltaic capacity, but this figure does not include the more than 7 GW from self-consumption,” he points out in an interview with Energía Estratégica España.

This volume of generation causes energy concentration during midday hours, drastically reducing prices and leaving large amounts of renewable energy unabsorbed.

“Photovoltaics peak in generation during hours of lower consumption, which leads to forced disconnections and a loss of economic value,” adds the executive.

This imbalance is also transforming financing dynamics. According to Corredoira, banks are increasingly requiring income guarantees, such as long-term contracts (PPAs), to finance projects.

“Nowadays, it is almost impossible to obtain financing without a PPA. Low prices during peak hours and the lack of storage regulation limit developers’ ability to offer these guarantees,” he states.

This has created a bottleneck in the development of renewable projects, as many permits are being modified to incorporate storage or suspended until the situation improves.

In this regard, the consultant points out that “in some cases, photovoltaic plants are being redesigned as stand-alone storage installations to bypass the price crisis,” he mentions.

The regulatory gap in storage

Energy storage appears to be the solution for shifting excess generation to peak demand hours, balancing the electricity market.

However, its development is limited by the lack of clear regulation that establishes compensation mechanisms.

“We need an economic framework that guarantees income not only from energy arbitrage but also from key services like frequency maintenance or demand response,” emphasizes Corredoira.

Currently, storage projects face uncertainty because there is no defined compensation scheme.

“Although storage plants are being designed, the figures are just approximations. Without specific regulation, it is impossible for investors to confidently back these projects,” he warns.

Moreover, Corredoira highlights that storage is essential to avoid the ‘duck curve’ phenomenon, which is already affecting countries like Australia and California.

Proposals and immediate solutions

“What we need now is regulation that allows energy to be shifted from excess hours to periods of high demand. This would not only stabilize prices but also make projects that are currently in limbo viable,” the consultant states.

Additionally, he proposes incentivizing large energy consumers like data centers, as Spain has a great opportunity to become a hub for data centers due to its high renewable energy availability. It currently has 10 GW of grid access requests.

“However, there is a lack of a strong commitment from the government to promote this strategy,” he comments, as the low price of renewables does not necessarily translate directly into lower electricity bills.