Spain’s Ministry of the Environment has formally launched its latest financial support scheme for energy storage, aiming to kickstart the deployment of 2.5-3.5GW of projects.
The scheme, approved by the EU in March under its Temporary Crisis and Transition Framework (TCTF), is expected to provide capex support to more than 100 projects totalling over 9GWh of capacity. A total of €700 million (US$800 million) is available in the form of capex grants.
It is open to standalone battery energy storage system (BESS) projects, thermal energy storage projects and pumped hydro energy storage (PHES) projects as well as those that are hybridised with renewable generation facilities. Eligible costs include civil works, storage systems, auxiliary equipment and systems and related expenses.
The Ministry of Environment – full name the Ministry for Ecological Transition and the Demographic Challenge (MITECO) – has given applicants until 15 July, 2025, to apply. The Institute for Energy Diversification and Saving (IDAE), part of MITECO, will manage the subsidy scheme, and is running a webinar on 5 June to go through the details.
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MITECO will distribute the funding across the 17 regions (and the two autonomous cities of Ceuta and Melilla). Nearly half of the financial support will be allocated to the southern region of Andalusia, with €311 million, followed by the northwestern region of Galicia with €86 million and the central region of Castilla-La Mancha with €80 million.
The projects will make the energy system in Spain more flexible, robust, and resilient, MITECO said. Spain and Portugal recently suffered a huge blackout. Industry commentators have speculated that more energy storage, particularly grid-forming energy storage would have helped, although it is too early to be certain.
A maximum subsidy amount has been set based on different technologies:
- €250 per kWh for BESS
- €300 per kWh for grid-forming BESS
- €300 per kWh for thermal energy storage
- €1,500 per kW (kilowatt) for new PHES projects
- €1,000 per kW for existing PHES projects
Projects will need to be built within 36 months of being granted the aid, with a final commercial operation date no later than 31 December, 2029.
Spain is targeting around 22.5GW of energy storage by 2030 as part of its National Energy and Climate Plan (NECP). But, it has been relatively slower to deploy grid-scale energy storage than other major EU economies including Italy, France, Germany, Belgium, Netherlands and the Nordics. However, some 1GWh is under construction according to a Sungrow executive, who discussed Spain with us in a recent interview (Premium).
