AEPIBAL Day: Capacity mechanism progress, upcoming new regulation for energy storage in Spain

Spain’s AEPIBAL held its annual gathering in Zaragoza on Nov. 28, 2024, with 470 attendees from the energy storage industry and members of the public administration. More than 40 people were left on the waiting list due to the capacity of the Fundación Caja Rural de Zaragoza venue.

Representatives of MITECO, CNMC, and part state-owned grid operator REE – plus officials from Spain’s autonomous communities – took part in more than a dozen panels, table discussions, presentations, and interviews at AEPIBAL Day (AD).

AEPIBAL Vice President Eugenio Domínguez Amarillo said, “Storage is the fundamental piece of the puzzle of the energy transition precisely because it is the only element of complete flexibility for generation and demand, but in order to have it, we must regulate from that perspective: full flexibility and the necessary markets so that storage competitively provides said flexibility to the electrical system. This will generate new business models that are also flexible and economically competitive for developers and a much more efficient electrical system, energetically independent and, therefore, with a lower final cost for the consumer and more resilient to elements external to our decarbonized energy mix.”

Association president Luis Marquina asked the industry to remain calm, the administration to cooperate, and the sector to be optimistic. He told pv magazine after the event, “We want all the actors related to storage to be up to date in one day… It seems simple and it is not but we believe we have achieved it.”

Jacopo Tosoni, executive manager and head of policy at the European Association for Storage of Energy, said “Spain must decide” on its capacity market since the European Union already includes that as an option. “The capacity market is good but it is not enough on its own,” warned Tosoni. “Other support mechanisms are needed, such as auctions. It is a European order and Spain has to implement it.” The nation must also eliminate what is effectively double taxation on storage, as Brussels has asked it to do, he said, adding, “Storage must be treated as a good of superior interest. That is clearly a guideline from Europe and it must be like that at a European level. Storage is clearly at the center of political dialogue in Europe. The problem in Spain is that there are many unpaid services and the return on investment is much slower.”

Regulator the CNMC ​​has stated a focus on flexibility with the statement “Storage, as long as it can operate, let it operate.” However Spain’s current grid rules enable the injection of energy, in generation mode, only between 0:00 and 10:59 and 18:00 and 23:59. The consumption of grid electricity for storage units is permitted only between 0:00 and 7:59 and 11:00 and 17:59. Setting rules for “flexibility” like that is “putting barriers in the field,” said AEPIBAL’s Amarillo.

The CNMC said its mission is also to “reduce costs for consumers” and spoke about consumer rate of return.

Fátima García Señán, deputy director-general of storage and flexibility at MITECO, said the ministry is “working to prioritize measures that will have the greatest impact on the development of storage.”

Carlos Redondo, MITECO’s deputy director general of electric energy, said, “We have a fairly closed model of the capacity mechanism, a draft, we are waiting for the changes to be finalized in the ministry.” Stating the ministry hopes to have the capacity mechanism model ready within a few months, Redondo said the legislation includes “the limitations that the [European] Commission has imposed on us, one of them being the existence of the figure of the independent aggregator.” He said the idea is “to guarantee the security of supply and give strength to the [grid] system.”

Jesús Ferrero, subdirector general for renewable energy and studies, said the ministry is preparing a complementary scenario to the capacity mechanism. Referring to Spain’s remuneration framework for the generation of electricity from renewable energy sources (REER) subsidy and auction program, Ferrero said, “There will be regulatory changes to solve problems in 98% of cases, hybridization will not lose its REER. We want renewable energy that is at zero cost to move to night hours, that is the objective and the instrument is storage.”

The ministry also stated storage “should not pay IVPE” (tax on the value of the production of electrical energy) because “it is not a new contribution of energy to the system. The interpretation of how to apply that requirement “will come from the Ministry of Finance,” according to MITECO.

Luis García, from MITECO agency the Institute for the Diversification and Saving of Energy, said “We are fighting with the EU to launch a new line of aid.”

Carmen Longas, from REE’s network access department, outlined the current status of grid access for energy storage facilities. “We continue to make progress in access to storage facilities and we expect news, since on Dec. 2, [2024] a new calculation methodology will be applied which, in some nodes, will increase the access capacity for storage facilities.”

AEPIBAL chief Marquina said “The third edition of the AD has been a success in its ability to attract people, and in the development of content. The presence of public officials who are key to the development of [energy] storage in Spain (and the hard work behind it to synthesize the topics well and discuss them in front of 500 people) give this event a special soul and a unique tangible value today. AEPIBAL always works from the rigor of the content because [energy] storage is at the essence of a new energy model that will change our way of understanding the energy market, supported by renewable energies, which forces us to learn a lot: technologies, regulation, … industrial development, innovation, competitiveness, circularity etc. We are happy because we see 500 people who have received more than they expected and that is the objective of our AD.”

From pv magazine España.