Spain is experiencing one of its busiest periods for BESS (Batteries and Energy Storage Systems). According to the latest survey by Energía Estratégica (Strategic Energy) on the files published in the Official State Gazette during July, batteries were present in 23 of the 55 energy projects identified .
The figure is striking: they represent approximately 42% of the total . Looking at the broader scope, seventeen correspond to projects that combine photovoltaics and storage, while another four are independent BESS developments.
The photograph, however, contrasts with the volume that is already effectively in operation.
In a dialogue with Energía Estratégica , Álvaro Simón, founder of ASB Renewables Consulting , warns that the gap between announced volume and actual operational capacity remains one of the main features of the Spanish market.
“We have less than 300 MW in operation in the first half of the year, which is a fairly small figure compared to other European markets. But in the pipeline planned to come online, we have between 3 and 4 GW of projects that, in theory, should do so between the fourth quarter of this year and next.”
The size of that portfolio shows the existing interest, but it does not imply that all those assets will meet the initially planned schedules.
The BESS schedule begins to separate the pipeline from executable projects
One of the first differences appears in the actual development times.
Although Spain has made progress in various measures aimed at facilitating the implementation of storage, the procedures continue to impose considerably longer timelines than some buyers assumed when entering into certain projects.
“There is a mismatch between the buyer's or investor's expectations and the reality of development. In many cases, these projects were expected to become operational next year, but the outlook, even being optimistic, shows that many will end up coming online starting in 2028.”
The problem takes on special importance in a market where a significant part of the operations has been built on forecasts of rapid arrival to ready-to-build or entry into operation.
The consequence is that having access, starting a process, or even making administrative progress is no longer enough to automatically determine the attractiveness of an asset.
The ability to accurately anticipate when construction can begin and when revenue can start to be generated is becoming a central variable in valuations.
And there appears the concept that Simon places above the rest when describing the current conversations between developers, buyers and capital.
“The first thing is certainty. Certainty, first, in development.”
The schedule is not the only barrier.
Storage financing also needs to demonstrate that the various revenue streams can be sustained over the time horizon used by banks and investors to evaluate the project.
Arbitrage continues to be part of that equation, but the sector's expectation is increasingly to combine it with adjusting services, balance sheet markets and future capacity remuneration mechanisms.
That is precisely why the debate is beginning to shift from how much a battery can capture at certain times in the market to how much of that income can become a sufficiently solid forecast to finance the asset.
“Many of the funders still do not fully support the models proposed by BESS.”
Simón points particularly to hybrid structures in which the battery does not come into operation at the same time as the photovoltaic installation, but one or more years later.
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“Traditional financiers are shying away from models with exposure they can’t mobilize and which they perceive as risky investments. We need to try to structure them, probably with shorter contracts, greater flexibility, and real hybrid models.”
The discussion about bankability thus becomes as relevant as the availability of projects themselves.
Spain can accumulate tens of gigawatts in different stages of development, but the speed at which that volume reaches FID will depend on investors and financial entities being able to translate the new revenue schemes into models that allow financing.
The capacity market is generating expectations, but it still needs to be realized.
Within this search for additional revenue, the future capacity market has become one of the main expectations of the sector .
Its development could provide a new layer of remuneration for technologies capable of offering both stability and flexibility, including storage.
"The news was received with great optimism because it is an expectation that had been demanded for a long time."
The interest does not solely correspond to the direct remuneration that may be derived from the mechanism.
For BESS projects, their true value will lie in how they can be combined with revenue from the wholesale market and adjustment services to build a more predictable structure.
For now, however, there is still not enough detail to automatically translate that expectation into financial models.
“It still needs to be largely implemented. It wouldn't be good news if we got stuck on the big numbers and the headlines and didn't end up developing the foundation and the expectation of return for those who want to take advantage of the mechanism.”
Spain still has to build its own track record
In addition to doubts about deadlines and income, there is a third, less visible barrier: accumulated operational experience.
Large international investors are evaluating the Spanish market against jurisdictions where larger portfolios of storage are already operational and generating real information on availability, degradation, revenue, and technical performance.
“The big players still see that there are less than 300 MW in operation. It is a market where those who enter want to do so with guarantees and prefer to see that there is prior experience of projects already underway.”
This situation could begin to change rapidly if some of the assets planned for the end of 2026 and 2027 are successfully connected.
Each new plant will not only expand available capacity, but will also provide real benchmarks on costs, performance and revenues that can be used to assess subsequent generations of projects.
Until then, the market will continue to operate at two speeds.
On the one hand, a rapidly growing pipeline and regulations that are beginning to recognize the role of flexibility. On the other, investment decisions that require demonstrating much more than the existence of a permit or an arbitrage opportunity.
The challenge for Spanish BESS is thus beginning to shift from the number of available projects to their capacity to become bankable assets.
The volume is already on the table. The next test will be to see how many manage to pass the bankability filter and reach FID.