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In this week’s Power Playbook: Yusuf Latief discusses how the blackout in Iberia has been accelerating much-needed investment into the power grid.
If the April blackout in Spain and Portugal proved anything, it’s that grid resilience remains a critical issue requiring fiscal attention.
The last few months have shown that this attention is being paid. Here’s how.
Loans and measures for interconnection and storage
Just this week, I reported on Portugal’s government introducing numerous measures to strengthen the power system, with €137 million ($158.5 million) announced to bolster resilience.
The grid investment is divided into different technical components, including shunt reactors, STATCOMS, and a synchronous compensator.
Additionally, they announced that by January next year, an auction will be launched for a 750MVA battery-based storage system alongside a €25 million ($28.9 million) tender to support improvements in the responsiveness of critical infrastructure.
With the funding, Portugal also said it would work alongside Spain to prioritise interconnections – such as the one with Morocco that was crucial for restoration during the April blackout.
Also this week, in their H1 results, Redeia announced that their TSO investments, through Red Eléctrica, had been making ‘solid progress’.
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Indeed, they report spending of €564 million ($644.8 million), up 34% from H1 2024.
The company cites continued asset renovations, actions to support the distribution network, and numerous works on interconnections, a standout being the interconnection with France.
And back in June, this very interconnection was the subject of an EIB pledge of €1.6 billion ($1.9 billion).
The bank has extended loans to Spanish and French TSOs Red Eléctrica and RTE Réseau de transport d’électricité (RTE) for the interconnection, which is already under construction by their joint venture Inelfe and expected to become operational in 2028.
At the time, said Dan Jørgensen, European commissioner for Energy and Housing: “Europe needs more integrated and more interconnected energy systems and markets. This is crucial to ensure our citizens have access to clean and stable supplies, wherever they are. This is what a genuine Energy Union is about.
“I very much welcome the additional financial support offered by the EIB for a key project that will ultimately improve the lives of many across the Pyrenees and beyond.”
Financing system resilience
Back in May, in a Power Playbook reacting to the blackout and its implications, I wrote about how the event highlighted the need to invest in certain technologies, such as STATCOMs, storage, or synchronous condensers, to back up the power grid and meet inertia requirements.
I also cited analysis from BloombergNEF, which found that Spain lagged behind other European states in spending on the grid relative to renewables investment – much of its grid equipment was built and installed decades ago, before the solar rollout.
Which is why such announcements are to be lauded, perhaps demonstrating that the needle is moving.
And all this isn’t to mention the investments from Iberdrola to repair and reconstruct the power grid in Valencia that was hit hard by floods last October.
But what do you think? Are these investments enough? What else can be done to increase resilience, and are the right elements of the power grid in focus?
Reach out and let me know so I can feature your thoughts in the Power Playbook.
Cheers,
Yusuf Latief
Content Producer
Smart Energy International
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