European Commission approves new 700 million aid scheme to boost energy storage in Spain

The European Commission has approved a new aid scheme that will allow Spain to deploy large-scale electricity storage, both in hybridisation with renewable energy facilities and stand-alone and thermal. This is a programme of the Ministry of Ecological Transition and Demographic Challenge that will be allocated 700 million euros and will favour the process of decarbonisation of the electricity system with the expansion of fundamental technologies for the integration of renewable energies.

The call will consist of direct subsidies for co-financing - up to 85% - of investments in energy storage facilities and will be carried out through the Institute for Energy Diversification and Saving (IDAE) with European funds from the ERDF Multi-regional Programme 2021-2027.

Funding for around 100 projects

Between 80 and 120 projects are expected to be eligible for funding and should be completed by the end of 2029. Taking into consideration the ratios of aid granted per megawatt of storage in previous calls, 2.5 to 3.5 gigawatts of new capacity could be expected.

This decisive boost to the development of energy storage will help ensure the transformation of the energy system to make it more flexible, robust and resilient. The reinforcement of this technology will also lead to greater penetration of renewable energy sources in the Spanish electricity system, as storage acts as an enabler for them.

The increase in this type of installation is also expected to reduce system costs in the capacity markets, as well as in the prices of secondary and tertiary regulation of the electricity system.

The National Integrated Energy and Climate Plan (PNIEC), in its update of 25 September 2024, stresses the importance of energy storage to guarantee electricity supply, its quality and reduce dependence on fossil fuels in an environment with greater integration of renewable energies. The document highlights the importance of energy storage as a key technology, "both for its ability to shift generation to times when it is needed, and for its capacity to provide other complementary services to the grid."

Prior public consultation

Until Friday 21 March, the Ministry of Ecological Transition and Demographic Challenge is holding a public consultation on the proposed call for aid for energy storage with ERDF 21-27 funds, which sets out the objective of the initiative, which will be a decisive step in institutional support for the development of storage.

This aid is in addition to the energy storage support programmes activated by the government thanks to the NextGenerationEU funds of the Recovery, Transformation and Resilience Plan (RTRP), worth more than 600 million.

Non official translation