Spain establishes electrical capacity market to ensure supply security

Spain has established a new capacity market for the peninsular electrical system through Order TED/966/2026. The regulation, published in the Official State Gazette, aims to ensure security of supply as the integration of renewable energy sources increases.

Managed by Red Eléctrica de España (REE) and supervised by the National Commission on Markets and Competition (CNMC), the market will use a centralized model with competitive 'pay-as-bid' auctions. These auctions will offer long-term price incentives to guarantee firm power availability and encourage investments in energy storage and clean technologies.

The mechanism includes several auction modalities: main auctions for existing installations (12-month terms) and new investments (up to 15 years), adjustment auctions for unforeseen coverage issues, and transitional auctions to ensure supply until the first main auction begins. Participants can include electricity producers, storage facility owners, end consumers, and demand or production aggregators.