The European Commission has announced that it has approved a €9 billion Spanish capacity support scheme under EU State aid rules, paving the way for a long-term support framework designed to safeguard electricity supply and strengthen grid reliability.
The scheme will operate for 10 years and is intended to ensure that sufficient generation, energy storage and demand-side flexibility resources remain available during periods of electricity system stress.
Capacity providers to be selected through auctions
Under the scheme, Spain’s transmission system operator (TSO) will procure the capacity required to meet the country's electricity reliability standards. Capacity providers will receive remuneration in exchange for committing to be available when needed during supply shortages or peak demand periods.
Participation will be awarded through competitive auctions that are intended to be transparent, technology-neutral and non-discriminatory. The scheme is expected to provide approximately €900 million per year in support. Over the 10-year implementation period, total funding could reach around €9 billion, although the final amount will depend on auction results and actual capacity procurement requirements.
Cross-border participation planned
Initially, participation will be limited to projects located within Spain. However, the Spanish government has stated its intention to open the scheme to capacity providers located in interconnected EU member states as soon as practical arrangements allow. This approach aligns with broader EU efforts to enhance electricity market integration and improve regional energy security.
According to the European Commission, the Spanish scheme broadly follows the principles established under the Clean Industrial State Aid Framework (CISAF).