Spain's renewable energy accounted for 59% electricity generation share, and a record 5.6 GW of new capacity was added in 2024. However, the complexity of managing this technology has a cost. The country now faces a €1.2 billion annual technical restrictions burden, more than double the average during 2020-2022.

This research examines Spain's technical restrictions systems, why standalone storage deployment remains at just 18 MW despite massive opportunity, and how developers can capitalise on locational value for storage.

Key Takeaways

• €1.2 billion crisis: Technical restrictions costs were €240 million in 2019. In April 2025 alone, the cost of technical restrictions went up to €197 million.
• Massive energy waste: In 2024, nearly 1.7 TWh of energy was curtailed due to technical restrictions
• Geographic concentration: Extremadura and Castilla-La Mancha lead in solar constraints, while wind constraints occur more frequently around Navarra and Aragón.
• Activation based on stability: Conventional plants earn premium compensation (€166/MWh vs €63/MWh in wholesale markets in 2024) while renewables face uncompensated losses in phase-one restrictions
• Regulatory transformation: New PO 7.4 procedures, voltage control market could shift the technical restrictions dynamic

When renewables outpace the grid

Spain's renewable boom tells a story of success meeting infrastructure limits. While renewable capacity has surged over the past 15 years, the transmission grid remains unchanged, as a network designed for centralised power plants now has to handle distributed and intermittent generation.

Even with a robust grid, renewable plants frequently face constraints. Assets sell electricity in the wholesale market, only to have their actual production curtailed by grid limitations.

Technical restrictions are divided into two phases. The first phase aims to address local constraints, while the second phase involves the TSO balancing generation and consumption within the country.

Phase-one restrictions provide no compensation to curtailed renewable energy generators, resulting in pure economic losses. When Red Eléctrica (Spanish TSO) determines that a transmission line can't handle scheduled flows, renewable plants are ordered offline with zero payment. In 2024, approximately 2% of total renewable generation was curtailed this way.