Negotiations for long-term power purchase agreements (PPAs) in Spain are facing strong downward pressure. The market has settled into a €25–33/MWh range, making it increasingly difficult to close PPAs above €30/MWh, according to Álvaro de Simón, Energy and Cleantech Advisor at ASB Renewables Consulting.
The main driver is instability in spot market prices. According to the consultant, demand is acting with full awareness of a highly volatile pricing environment, particularly after last spring’s experience. “In April and May, we saw capture prices fall below €5/MWh,” he said in an interview with Energía Estratégica.
Against this backdrop, buyers are rejecting offers above certain thresholds. “Clients tell you: ‘we’re not going to sign at €35 or €40. We’ll go somewhere around €25, €32 or €33 at most,” De Simón explained. The buyer’s dominant position—supported by abundant renewable generation and low wholesale power prices—has established a new floor for the market. This situation, no longer seen as an anomaly but as a structural trend, is strongly shaping purchasing decisions.
“That reality will repeat itself year after year in a cyclical way, but each time more intensely,” he warned.
At the same time, regulatory uncertainty is adding further friction. Delays in the approval of key measures, such as the royal decree expected in July, are undermining confidence among developers and slowing investment decisions in strategic projects.
In some cases, this leads to decisions to halt permitting processes in order to avoid triggering guarantees or to make administrative adjustments that buy time. “There is little pressure to take immediate decisions because of the uncertainty. There is a clear need to delay and postpone processes,” he said.
However, amid this stalemate, energy storage is emerging as one of the few elements capable of unlocking value. “Today, no project is conceived without hybridisation between solar PV and storage,” De Simón stressed.
He also noted that the blackout on 28 April acted as a “catalyst for accelerating investment in storage”, with the battery attachment ratio in the commercial and industrial segment increasing by more than 60% in just eight months, driven by the need to capture revenues outside the spot market.
The challenge, De Simón pointed out, is that regulation has not kept pace with technology. “If I consider a new development, my feeling is that I’m operating in unknown territory and I don’t really know how my project will be assessed,” he said. For this reason, he sees an urgent need to establish clear rules for permitting—especially for hybrid projects—and mechanisms that provide medium-term revenue stability.
Drawing on his recent experience with on-site projects in the commercial and industrial segment, De Simón added that PPAs in this space are being signed at around €40–45/MWh, as they are not subject to grid tariffs, balancing services or grid access constraints.
“There is no real sense of urgency to invest, even though these are very attractive prices from the consumer’s perspective. Processes drag on because nobody wants to take decisions,” he analysed.
Looking ahead to 2026, De Simón believes any recovery will depend on three pillars: regulatory certainty, tax incentives for hybrid projects, and greater clarity in permitting procedures. While he does not rule out direct support, he considers that other mechanisms could be more effective.
“There has to be some kind of additional incentive. It doesn’t necessarily have to come in the form of a subsidy, but through other channels, such as tax relief or CAPEX improvements,” he suggested.
By way of conclusion, De Simón summed up the current situation: “We are in a period of relative impasse in the industry, and for activity to pick up again there needs to be a push—at market level, at regulatory level, and in terms of communicating clearer signals.”
