European Commission approves €9 billion Spanish electricity capacity scheme
The European Commission has given the green light to Spain’s new capacity‑market mechanism aimed at preventing future blackouts. The scheme will provide up to €9 billion in state‑aid over the next ten years – roughly €900 million a year – to remunerate generation plants, large‑scale batteries, pumped‑hydro storage and industrial demand‑response programmes that can supply firm power in periods of scarcity.
The plan, evaluated as “necessary, appropriate and proportionate”, will be run by Red Eléctrica through competitive auctions that set the price per megawatt‑year. It targets the reinforcement of supply security after the major grid failure in April 2025 and supports the integration of renewable energy by ensuring sufficient firm capacity.
Participation will be open to existing and new projects in Spain and, eventually, to facilities in other EU Member States linked to the Iberian grid. The funding will be recouped from electricity bills, with the amount depending on auction outcomes.