Spain’s long-awaited capacity market is approaching implementation after the national regulatory framework was formally approved and a technical assessment identified potential security-of-supply risks from 2028 onwards.
The only remaining hurdle is final authorisation from the European Commission, whose decision will determine when the first capacity auctions can be launched.
Against this backdrop, Spain’s energy sector remains on standby, with differing views on the likely timeline but a broad consensus on the urgency of deploying the mechanism. While no official date has been set, some industry sources believe the first capacity auction could take place in the first half of 2026, provided Brussels grants approval in the coming weeks.
Others, however, expect the launch to be delayed until 2027, citing the operational work still required once EU approval is secured. As a result, the timetable remains open and dependent on ongoing regulatory decisions.
Chema Zabala, Managing Director at Alantra Energy Transition, said the regulatory process at the national level is essentially complete.
“We met with the administration in November. They told us that everything was finalised domestically. The document went through the Council of State and was then submitted to Brussels,” he told Energía Estratégica.
From his perspective, the first auction could still be held in the first half of this year, although he acknowledged that the lack of updates since the Christmas break calls for caution.
“The process should be fairly immediate because everything is ready. But as the weeks go by, we need to be more cautious,” Zabala said.
A more conservative outlook was offered by Álvaro Sanz, Global Head of Development at Enerside.
“I would expect the first auctions to take place between the second half of 2026 and early 2027, depending on when Brussels gives the green light,” he said.
In his view, even after European approval is granted, additional steps will still be required, including the publication of the final ministerial order, the activation of the transmission system operator Red Eléctrica de España, and the organisation of the auction itself—processes that are difficult to compress in time.
By contrast, Alicia Carrasco, CEO of olivoENERGY and Executive Director of ENTRA, believes that holding the first auction this year is still feasible if the European Commission grants approval in the near term.
“The regulatory process has advanced substantially at the national level, and the mechanism is technically ready,” she said. “We are no longer resolving structural issues, but fine-tuning the final details before launch.”
The technical trigger for the capacity market lies in a coverage analysis carried out by Red Eléctrica, which identified security-of-supply risks emerging from 2028 onwards. This assessment underpinned the decision to move forward with the mechanism.
Carrasco stressed that all steps required under Spain’s electricity regulation have been completed and that the process is progressing normally. “The process is moving at the pace it would have followed even without the blackout,” she said.
Although the nationwide blackout in April 2025 raised public awareness, the request for a capacity mechanism predates the event. Nevertheless, it reignited the public debate.
“The need was already there, but it wasn’t as visible. People hadn’t experienced power cuts at home. The blackout made the urgency tangible,” Sanz explained.
Carrasco highlighted that a capacity market—which remunerates assets for being available—improves the investment case for demand-side flexibility and energy storage, both key enablers of renewable energy integration.
Zabala, meanwhile, cautioned that the capacity mechanism alone will not be sufficient to unlock large-scale flexibility deployment, arguing that additional remuneration schemes will be needed.
It is also worth noting that the reform of the European electricity market foresees capacity payments exclusively for non-fossil flexibility. This could complement Spain’s mechanism if, following a planned review in 2027, the system is deemed to require additional flexibility.
Spain’s roadmap is based on T-5 auctions—held five years ahead of delivery—as the main pillar of the scheme, alongside transitional auctions aimed at addressing short-term needs.
Sanz argued that it would make more sense to start with transitional auctions, as these could provide immediate solutions while the main mechanism ramps up.
However, Zabala warned against launching transitional auctions without clear visibility on the resources expected to be secured through the main T-5 auction, suggesting that both processes should ideally be coordinated.
One potential sticking point in the approval process is the current requirement for suppliers and independent aggregators to identify participating consumers in advance. Carrasco described this obligation as problematic.
“No one can know today who their customer will be in 2028. Keeping this requirement would make demand-side participation virtually unviable,” she said.
She proposed adopting models already validated within the EU, such as those used in France or Poland, where market participants bid an estimated capacity and are only required to identify consumers two months before delivery.
Beyond the precise timeline, all interviewees agreed on the importance of delivering a robust and stable market design.
“It is more important to have a solid capacity market than to rush something out prematurely,” Sanz said, emphasising the need to provide certainty for investors and avoid subsequent revisions.
Zabala concluded on a similar note: “It is a very important signal for the sector, beyond its direct economic impact. Even from a market sentiment perspective, it is necessary.”
