Spain has taken a decisive step in strengthening its energy infrastructure with the launch of a €700 million support scheme aimed at expanding large-scale energy storage across the country. This initiative, coordinated by the Ministry for the Ecological Transition and the Demographic Challenge (MITECO), seeks to catalyze the deployment of between 2.5 GW and 3.5 GW of new storage capacity, with a total energy volume exceeding 9 GWh.
A Strategic Push Toward Grid Flexibility and Decarbonization
Unlike some of its European counterparts—such as Germany, France, and Italy—Spain has historically lagged in rolling out grid-scale storage. However, recent events, including a regional blackout on the Iberian Peninsula, have served as stark reminders of the need for greater grid flexibility and resilience. This new program signals a shift in national policy, aligning with Spain’s 2030 target of achieving 22.5 GW of energy storage under its National Energy and Climate Plan (NECP).
The scheme is backed by the EU’s Temporary Crisis and Transition Framework and co-financed through the European Regional Development Fund, with a strong emphasis on supporting economically disadvantaged regions. MITECO has delegated the management of the program to IDAE (Institute for Energy Diversification and Saving), which will host a webinar on 5 June to guide applicants through the process.
Who Is Eligible?
The program welcomes applications from developers of:
- Standalone Battery Energy Storage Systems (BESS)
- Renewables-integrated BESS projects
- Pumped Hydro Energy Storage (PHES)
- Thermal energy storage solutions
To qualify, projects must be grid-connected, have a minimum installed capacity of 1 MW, and enter commercial operation no later than 31 December 2029. Importantly, awarded projects must break ground within 36 months of approval or face progressive funding reductions tied to delays.
Funding Structure and Incentives
The scheme offers capex grants covering up to 85% of eligible project costs, including civil engineering, system components, auxiliary equipment, and digital control systems. The subsidy rates differ by technology:
- €250/kWh for standard BESS
- €300/kWh for grid-forming BESS and thermal storage
- €1,500/kW for new PHES installations
- €1,000/kW for existing PHES upgrades
Moreover, Spain is promoting local manufacturing and European supply chains. Applications that incorporate EU-made battery cells, packs, control systems, and transformers can receive additional points during the evaluation process. Second-life batteries sourced and repurposed within the EU are also eligible, supporting the region’s circular economy efforts.
Regional Equity and Industrial Development
A notable feature of the funding scheme is its regional distribution model. Half the budget is allocated to southern and less-developed regions, with Andalusia receiving €311 million, Galicia €86 million, and Castilla-La Mancha €80 million. This aligns with broader EU objectives to drive green industrialization in areas historically underserved by infrastructure investment.
In addition to technical merit and cost-effectiveness, applications will be scored based on socioeconomic impact, gender inclusivity, contribution to energy transition in coal-dependent regions, and innovation. This multidimensional approach reflects a broader ambition: not just to build more storage, but to build it smarter and more equitably.
A Timely Opportunity for Europe’s Storage Sector
With a July 15 deadline, the program is expected to attract interest from across the continent, particularly as the European storage market gains momentum. As of early 2025, Spain has roughly 1 GWh of grid-scale storage under construction, according to industry sources. This new wave of funding could accelerate the build-out, enabling developers, integrators, and OEMs to expand their footprint in one of Europe’s most promising emerging markets.
Spain’s move is more than a domestic policy shift—it is a signal to the European energy sector that strategic storage investments are now a critical part of national infrastructure planning. For stakeholders in battery storage, thermal storage, and pumped hydro, this program offers not only financial backing but also long-term stability and political support.
