Energy storage is emerging as a key lever in the new European electricity paradigm, according to projections by AGERE Energy Consulting, represented by its Managing Director, David Pérez, at the virtual event organised by Strategic Energy Corp.

During the second edition of the Storage, Renewable and Electric Vehicles Integration Forum – Second Edition, organised by Strategic Energy Corp through Mobility Portal Europe and Strategic Energy Europe, Pérez analysed the structural factors reshaping profitability and the design of renewable projects.

Strategic Energy Corp, in partnership with Future Energy Summit (FES), hosts major renewable energy gatherings, as FES stands as the leading platform for renewable energy dialogue in Spanish-speaking countries. Notably, on 24 June, the third edition of FES Iberia 2025 will take place at Colegio Caminos (Auditorio Betancourt, C. de Almagro, 42, Chamberí) in Madrid. (Relive the previous edition here).

Notably, on 24 June, the third edition of FES Iberia 2025 will take place at Colegio Caminos (Auditorio Betancourt, C. de Almagro, 42, Chamberí) in Madrid. The meeting will feature companies such as Iberdrola, Nextracker, Engie, Grenergy, Statkraft, Acciona Energía, Red Eléctrica, and EDP Renovables, alongside key representatives from Spain’s regional governments and Latin America. Key discussion topics will include solar and wind energy, energy storage, green hydrogen, distributed generation, PPAs, auctions, and new projects. AGERE Energy Consulting has already confirmed its participation in this upcoming edition.

The market has changed radically

“The Spanish electricity market has changed significantly in the past two years,” said Pérez. “In 2023, demand was lower than in 2022, and so far in 2024, it’s also down. We are facing a structural consumption problem.”

This drop in demand is coupled with a high share of renewables. “We are already at 50% coverage, and we are seeing hourly prices of zero euros. Reaching 81% by 2030, as set out in the PNIEC, is simply unsustainable,” he warned.

In this scenario, project profitability is seriously compromised. “With such prices, no project can hold. No investor will commit without clear profitability signals.”

Storage at the heart of the business model

“In the past, projects were designed to maximise production. Now, they are designed to maximise the average price. When you sell your energy, it is more important than how much you produce,” he added.

This shift places storage at the centre of the business model. “It’s no longer a complement. It’s the core of the business model. It allows us to shift energy from low-price to high-price hours. Arbitrage is where profitability now lies.”

“Projects that are surviving today do so because they have storage, bilateral contracts, or are located in zones with better hourly prices.”

A call for clear price signals

“We are seeing many zero-euro hours, but also hours with high prices. That hourly spread is an opportunity for those who can manage flexibility – and a threat for those who can’t,” analysed AGERE’s Managing Director.

In this context, Pérez calls on regulators to send clear signals to the market: “We need capacity mechanisms, storage tenders, and a clearer roadmap. Without predictability, no one will invest.”

“There have been no tenders for over a year, and the mechanisms planned to support investments are not being activated. This must be urgently addressed.”

He also pointed to the need for updated planning: “We do not clearly know how much storage is needed, where or when. Without this information, it’s very difficult to size projects.”

The PNIEC under pressure

“It’s extremely difficult to meet the PNIEC targets with current levels of demand and electrification,” Pérez stressed. According to his analysis, there is a growing gap between official goals and market reality.

“We are well below targets in electric vehicles, heat pumps, and overall electricity consumption. With falling demand, adding more renewables just worsens the average price.”

He also noted that the updated PNIEC barely includes new profitability mechanisms. “It assumes the market will resolve it, but the market is already signalling collapse. Without adjustments, the system won’t hold.”

Storage investments are already happening

Despite this complex context, AGERE sees a clear trend: “We are already seeing storage investment operations justified solely by their arbitrage capacity.”

“In low-return markets, storage begins to make sense because it allows survival when prices are no longer viable. It’s a way to secure income in an increasingly volatile market.”

“What was marginal a few years ago is now central.” For AGERE, this transition demands a complete rethink of how renewable plants are designed, financed, and operated.

“Storage is no longer optional – it’s a necessity for any project that seeks to have a future in Spain,” Pérez concluded. “If we don’t get price signals, demand recovery, and a functional regulatory framework, we’ll see a market freeze.”

And he reiterates: “Only those who build flexibility into their models, through storage or appropriate contracts, will survive this new cycle.”