Spain produces more and more renewable energy, but producing a lot is not enough. Prices that collapse at midday, wasted energy and a grid that has to adapt: the challenges of the next phase.
The market is clearly changing. In just a few years Spain has become one of the European countries where the most renewable energy is being developed. That shows how quickly we can move forward with the energy transition, but it has also brought back a debate that seemed forgotten: the law of supply and demand.
When there is too much energy at midday
On some days, for several hours, almost all the electricity we consume comes from renewable sources. That is great news, but it has a direct consequence: during those hours there is more energy than can be consumed, and the price collapses, sometimes to zero or even below.
When the grid cannot absorb that production, plants have no choice but to curtail their output and waste energy they could already be generating. It is like a vegetable garden that produces more tomatoes than can be sold in a day: without a cold store, part of the harvest is lost.
The big challenges
1. Storing energy for when it is needed. The "cold store" of the power system is storage: batteries, pumped hydro and, in the future, other technologies. They charge with cheap midday energy and give it back in the evening and at night, when demand rises and the sun has gone.
2. Keeping projects profitable. If every solar plant sells at the same time, they all sell cheaply. This effect, known as price cannibalisation, forces projects to be rethought: hybridising PV with batteries, signing long-term power purchase agreements (PPAs) or finding consumers who can adapt their demand.
3. Grids and grid access. Securing a grid connection point is today one of the biggest bottlenecks. Without more grid capacity and faster management of access permits, many projects are left waiting.
4. System stability. Traditional power plants naturally provided stability to the grid. With more and more renewables, that role has to be covered by new solutions, such as grid-forming inverters, batteries and voltage control services. The Iberian blackout of April 2025 put this topic at the centre of public debate.
5. More flexible demand. Charging the electric car, heating water or running the washing machine when the sun is shining and energy is cheap. The more flexible demand is, the better renewable energy is used.
Conclusion
The first phase of the transition was about producing clean energy. The next one is about using it well: storing it, moving it through the grid and consuming it at the right time. That is where today's opportunities lie, both for large projects and for every home.