In August, the wholesale price averaged €118.25/MWh , but during peak daylight hours it fell to €26.37/MWh , compared to €164.19/MWh recorded outside of those hours. This gap highlights one of the main imbalances that is beginning to affect the profitability of new renewable energy capacity in Spain.
The pressure also affected long-term contracts. In July, while the Pexapark European PPA index rose, Spain's fell by 3.9% . At the beginning of September, OMIP placed solar PPA futures at around €29.70/MWh for five years and €25.63/MWh for ten years .
Meanwhile, energy storage is gaining prominence in the energy reports published in the Official State Gazette (BOE) , while new rules on flexible access and aggregation are beginning to expand the tools available for managing the system. The continued operation of the Almaraz nuclear power plant until June 2030 adds another variable to a technological balance that was already shifting.
But the underlying challenge emerges later. AleaSoft currently identifies the networks as the most immediate bottleneck and points to electricity demand as one of the decisive variables towards 2030.
At this crossroads between pressure on photovoltaics, BESS bankability and consumption growth, Antonio Delgado Rigal , CEO of the firm, spoke exclusively with Energía Estratégica about the balances that will define the Spanish electricity market.
Photovoltaics: from growth to the risk of cannibalization
Spain maintains a large-scale renewable energy pipeline: a selection of projects with administrative activity published in the Official State Gazette (BOE) alone exceeds 5 GW so far in 2026. To what extent might this expansion continue to put downward pressure on prices during peak solar hours? And, looking ahead to 2030, what evolution do you expect for the price captured by photovoltaics?
The downward pressure during daylight hours will continue. It's practically inevitable.
Photovoltaics has a very specific characteristic: when we install more plants, they all tend to produce electricity during the same hours. The more capacity we add, the greater the supply during those hours, and the lower the price tends to be.
That's why it's increasingly important to differentiate between the average market price and the price captured by photovoltaics. A solar plant doesn't sell its electricity at the average annual price, but rather at the prices for the hours during which it is producing.
The Integrated National Energy and Climate Plan (PNIEC) forecasts around 76 GW of photovoltaic capacity by 2030, including self-consumption. What will need to accompany this deployment to prevent the gap between the average price and the price captured by solar power from widening further?
If this expansion is not accompanied by storage and a significant increase in demand during daylight hours, the gap will continue to widen.
This doesn't mean that photovoltaics will cease to be profitable, but rather that the business model is changing. Location, production profile, PPAs, financial structure, and especially the possibility of incorporating energy storage will become increasingly important.
When does cannibalization cease to be a one-off price problem and begin to truly threaten the financing of new projects?
It starts to become truly worrying when it stops being a phenomenon lasting a few hours and becomes something structural.
Spain is already entering that phase. We are seeing more and more hours, especially in spring, summer, and on weekends, when high photovoltaic production coincides with relatively low demand. The result is very low and even negative prices.
For a merchant project, the immediate effect is a reduction in expected revenue. For a financed project, there is also another consequence: increased uncertainty about cash flows.
And banks finance cash flows.
So where is the difference between a project being profitable and one being bankable?
We strongly emphasize the difference between profitability and bankability. A project may present an attractive Internal Rate of Return (IRR) in the central scenario and yet not be robust enough to secure financing. It is necessary to analyze what happens to the price captured in unfavorable scenarios and whether the project remains capable of servicing its debt.
Cannibalization is no longer just a price issue. It's becoming a bankability issue as well.
Added to this pressure are renewable energy spillovers. How far can they grow if grids, storage, and flexible demand don't advance at the same pace?
If we continue to install renewables faster than the growth of grids, storage and flexible demand, curtailments will increase.
It is important to distinguish between technical spills, associated with network restrictions or system operation, and economic spills, when production ceases to make sense due to very low or negative prices.
Its evolution towards 2030 will depend on the progress of electrification, batteries, and grids. If these investments are delayed while photovoltaics continues to grow, the phenomenon could intensify significantly.
And there's an important paradox: having surplus energy doesn't necessarily mean there's a surplus of renewables. Often it means there's a lack of capacity to transfer that electricity over time, through storage, or across space, through grids and interconnections.
BESS: from pipeline to funding test
Spain has well over 40 GW of BESS projects with granted or pending access and connection permits. How much of that pipeline do you think will actually be built?
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Not all of the current pipeline will be built. That's normal for any technology entering a phase of rapid expansion.
In August 2026, Spain had approximately 260 MW of installed and operational electrochemical battery storage capacity , compared to a much larger volume of projects under development. This gap perfectly illustrates the current state of the market.
From now on, the question will be which ones are truly bankable. Those that will move forward are those with good grid connectivity, suitable location, solid permits, competitive costs, and, above all, a credible revenue model. There will also be differences between stand-alone and hybrid batteries, especially when they can leverage existing grid connections.
In the next two or three years we will stop measuring the BESS market by the gigawatts of pipeline and start measuring it by those that get financing and actually go into construction.
With the spreads currently being recorded in the market, can arbitrage alone sustain the business case for a battery?
It can generate very significant income, but I wouldn't propose a project financed solely by thinking about that source.
In Spain, the one-hour intraday spread has averaged approximately €114/MWh in 2026 , rising to around €148/MWh in July and hovering around €193/MWh in August. These are very attractive levels, but we cannot assume they will remain so for fifteen or twenty years.
The challenge is not to prove that a battery can make money, but that it can generate sufficient revenue in different scenarios throughout its useful life.
Can the capacity market become the piece that finally unlocks the bankability of storage?
It can be a very important piece because it introduces a different source of income that is less correlated with arbitrage.
One of the decisive elements will be derating : what percentage of a battery's nominal power will be recognized as firm capacity. The conditions and schedule of the first auctions will also need to be determined.
The capacity market can greatly improve bankability, but it will not replace other income.
The market towards 2030: demand enters the scene
Looking ahead to 2030, how do you envision the Spanish electricity market functioning?
It will probably become even more difficult to talk about a “typical day.” Solar and wind power will play an increasingly important role during peak renewable energy hours, often driving prices to very low or even negative levels.
When that production declines, hydroelectric power, storage, and combined cycle gas turbines will play a decisive role. Gas will continue to influence periods of high prices, although it will likely set prices for fewer hours than it does today.
On a sunny day, the batteries will charge during the peak hours and discharge when photovoltaic production drops. This difference in value between different times of day will become increasingly significant.
Therefore, the market in 2030 will have more periods of very low prices and, at the same time, periods of high prices. Batteries will be one of the system's major arbitrageurs: they will absorb electricity when it is abundant and release it when it is scarce.
If Spain manages to continue installing renewables and storage, what is needed to prevent a multiplication of hours with low or negative prices?
Today, the most immediate bottleneck is the networks. In the medium and long term, the biggest challenge will be demand.
We need to strengthen transport and distribution, accelerate connections, and reduce processing times. Without a network, neither new generation nor new demand can connect at the necessary pace.
But looking ahead to 2030, the decisive factor will be the growth in electricity consumption. In the first seven months of 2026, it increased by 2.6% year-on-year . This is a positive sign, although electrification will need to accelerate in the coming years.
And considering that Almaraz will continue operating until 2030, how does that decision change the balance between nuclear, renewables, gas, and storage?
Nuclear power provides virtually continuous generation at a low variable cost. Keeping Almaraz operational for longer reduces the need for gas-fired generation and puts some downward pressure on prices.
At the same time, during peak renewable energy production hours, it adds more baseload generation and can increase competition between technologies and surpluses.
The analysis included in the ministerial order estimates that its continuation until 2030 would reduce the renewable generation planned for that year by approximately 1.4% and that of combined cycles by around 7% compared to the PNIEC scenario.
It has an impact, but it doesn't change the structural trajectory. We will continue to need networks, storage, flexibility, and demand growth.