The Spanish renewable energy market is beginning to undergo one of its most significant financial reconfigurations since the solar boom of recent years. A growing number of projects risk not reaching their commercial operation date (COD) under the economic conditions for which they were designed. The combination of negative prices, historically low revenues, and curtailment is forcing developers, IPPs, and investors to rethink their strategies in search of bankability.
During the first quarter of 2026 , 397 hours of negative prices were recorded in the Spanish electricity market, while in some of the most affected nodes, the actual curtailments reached between 30% and 37% , according to data collected by market participants.
“ The traditional financial model for pure solar energy is exhausted. Hybridization with BESS and new hedging instruments, such as 12-year tollings or hybrid PPAs, are now the realistic way to make projects bankable again,” warned Álvaro de Simón , Founder and Strategic Advisory & Transaction Support of ASB Renewables Consulting, in an interview with Energía Estratégica.
The impact is already being felt directly on development pipelines. According to the executive, a growing number of projects will likely not reach their COD (Commercial Operation Dates) under the originally planned conditions.
“Many projects won’t reach COD (Call of Duty) with the expected results,” De Simón stated. He added that a large portion of these assets are currently pursuing two options: refinancing to reduce merchant exposure or accelerated hybridization processes with storage.
It's worth noting that in the last three months, the country processed more than 3,700 MW of solar projects, according to data from the Official State Gazette (BOE) analyzed by this publication . This market activity is driven by a clear group of developers , including Iberdrola, Ignis, Statkraft, Cobra, Verbund, Jinko Solar, X-ELIO, and Solaria , among others.
The current situation is beginning to change the behavior of banks and lenders. “We are seeing many lenders very reluctant to finance projects that do not have associated coverage,” the executive explained, adding that financial institutions continue to prioritize traditional long-term structures with very limited merchant exposure.
Specifically, the consultant explained that the market continues to show a preference for PPAs with maturities of around ten years and merchant exposure limited to a maximum of 20% or 30%. However, even these hedges are beginning to show weaknesses.
“The problem is that the prices of those hedges are at such low levels that the project is not profitable,” he argued.
In this context, the incorporation of batteries no longer appears as a competitive advantage but as a structural necessity to maintain economic viability. “Nobody considers entering the market without batteries,” De Simón asserted.
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Hybrid PPAs and tolling: the structures that are starting to unlock financing
Hybrid PPAs and long-term tolling agreements are emerging as alternatives to restore bankability in an increasingly complex environment.
According to the specialist, financiers continue to prioritize solar assets backed by traditional long-term hedges. However, in the storage segment, tolling models are beginning to gain acceptance, as they allow for predictable income to be secured for a significant portion of the asset's lifespan.
“Banks are open to solar profile financing on the one hand and low-tolling BESS profile financing on the other,” the executive explained.
This trend is already beginning to be reflected in concrete transactions. One of the most significant examples was the recently announced agreement between Nadara and Trafigura for a 434 MW hybrid portfolio in Spain , considered one of the largest contracts of its kind signed to date in Europe. The deal combines wind and solar generation with energy storage under a structure designed to provide greater revenue stability in the face of increasing volatility in the electricity market.
In parallel, Grenergy also made progress in agreements linked to hybrid projects, reinforcing a trend that is gaining prominence among large European developers at a time when merchant exposure is beginning to lose its appeal for funders and investors.
The economic difference compared to traditional solar contracts is becoming significant. While numerous standalone photovoltaic PPAs are currently trading in a range close to 27 or 30 euros per MWh, hybrid structures manage to capture an additional premium thanks to the operational flexibility provided by storage.
“In hybrid PPAs you're looking at a price above 40 euros per MWh,” De Simón stated.
However, the market is still in an early stage of development. The lack of historical data makes it difficult to establish standardized benchmarks for energy financiers and buyers.
Energy storage is not without risks either. De Simón warned that many of the projects currently seeking to incorporate batteries could become operational simultaneously between the second and third quarters of 2027, potentially leading to a new market saturation.
“If all batteries become operational at the same time, the price gap would be significantly reduced, which would diminish the incentive for the battery itself,” he concluded.