Spain's $16bn, five-year plan to unclog its transmission grid

At an event in Madrid on Friday, the Spanish government presented the general outlines of its proposed Electricity Transmission Grid Planning strategy to 2030. Earlier in the week, capacity maps had revealed 83.4% of electricity distribution network nodes are saturated.

The plan will have a €13.59 billion budget for the transmission network – up from the €8.2 billion allocated for 2021 to 2026 – and will include €1.52 billion for interconnections with the European Union.

On top of that, more than €20 billion will be available to 2030 for the distribution network.

A draft royal decree regulating the grid investment plans will be available to read until Oct. 6. The existing grid investment limits – of 0.13% of Spanish GDP for the transmission network and 0.065% for distribution – will be raised 62% to free up an additional €7.7 billion for distribution and €3.6 billion for transmission spending, through 2030.

Third Vice President and Minister for Ecological Transition Sara Aagesen said the “partial” lifting of those limits “does not entail increases in consumers’ bills” as grid spending is being driven by rising demand which will be shared among sector stakeholders. The draft decree also includes provisions for using existing infrastructure rather than new facilities if doing so would bring lower system costs.

The draft legislation also proposes setting the same conditions for electricity distributors as those required of Red Eléctrica de España. The purpose of each investment must be outlined, under the terms of the draft decree, to avoid expanding networks “just because,” according to Secretary of State for Energy Joan Groizard. Electricity distributors will also be required to formulate processes to explain where and what they will invest in, under the draft legislation.

Aagesen said “at least” 10% of the raised budget would go to transmission and distribution system security, including voltage monitoring, the importance of which was highlighted in the widespread blackout of April 28.

The minister added, the expanded grid spending would meet an anticipated 27.7 GW of electricity transmission grid demand – almost 14 times the 2 GW previously expected through 2030.

Groizard said almost half of the projected demand – 13.1 GW – relates to green hydrogen; 9 GW will be driven by industry; 3.8 GW will comprise new data center permits; and 1.2 GW will come from port electrification.

The government anticipates 5.3 GW of electricity distribution network demand through 2030 and the draft royal decree proposes 422 connection extensions, of which 142 will be for new transmission network users; 196 will support distribution grid extensions; and 84 will be for special operators such as the Administrador de Infraestructuras Ferroviarias and ports.

The plan represents “a new approach to a historic opportunity,” said Groizard, and entails “a significant modernization of our electrical system.”

On the generation side, there are requests for 150 GW of solar energy capacity and more than 100 GW of storage – figures five and nine times higher, respectively, than the Plan Nacional Integrado de Energía y Clima forecast.