Spanish lobby warns saturated grid needs major investment for new connections

Aelec, an industry lobby representing major Spanish electricity companies, has cautioned that the nation’s electricity grid is saturated, necessitating significant investment to accommodate new connections and maintain stability.

The lobby group’s analysis of a map from Spanish grid operators reveals that over 80% of Spain’s grid nodes are unable to accommodate additional electricity volume, according to a Reuters report.

This limitation risks instability and a reduction in efficiency.

The Spanish grid, primarily managed by Redeia, is at a critical juncture where large investments and planning are essential to prevent bottlenecks, added the lobby group.

Aelec was quoted by the news agency as saying: “Without these conditions [improvements], it will not be possible to connect industry, housing, storage, or electric mobility, wasting the potential of renewable energy and limiting the economic growth and competitiveness that electrification can bring to Spain.”

The need for investment has been underlined by a blackout that affected Spain and Portugal on 28 April this year, sparking debates over the country’s investment strategies and the returns on such investments.

In Spain, the authorities regulate grid investments and cap the returns on these investments, which consumers ultimately fund.

The antitrust watchdog Comisión Nacional de los Mercados y la Competencia (CNMC) has increased the return on investments from the current 5.58% to 6.46%, although utilities are advocating for a higher return of 7.5%.

This July, Aelec criticised the CNMC’s plans to increase the guaranteed return on investments in the power grids as inadequate for keeping capital within the country.

The plan to raise the guaranteed return on investments came in response to calls for higher incentives following the April blackout.