Should batteries be a 'pay as bid' model in Spain?

As things stand in Spain, batteries will need a significant boost from capacity prices to fill the gap above wholesale, balancing & ancillary revenue streams. The ‘pay as bid’ structure of the capacity market can help battery assets achieve this.

Can batteries access the balancing market in Spain?

Balancing markets are another key source of battery revenue, but regulatory reform is required for batteries to access the Spanish balancing market. This is likely to happen relatively quickly but creates uncertainty around the level of balancing revenues.

Will CCGT fixed cost recovery help the Spanish capacity market?

As in other European capacity markets, CCGT fixed cost recovery will likely provide important medium term price support in the Spanish capacity market. New build batteries and existing CCGTs are likely to dominate price setting in the Spanish capacity market across the 2020s, but there will also be other technologies competing for contracts.

How can battery assets achieve 'pay as bid'?

The ‘pay as bid’ structure of the capacity market can help battery assets achieve this. Batteries may be very flexible, but they are constrained by relatively short duration response (e.g. a 1 to 4 hours discharge range).

When will Spain implement the capacity market?

Spain is planning to implement the capacity market across the next two years, given EU approval timelines. But the government is targeting transitional auctions in the meantime to secure capacity into the mid 2020s and test the mechanism.

How much money will Spain invest in a Gigafactory & assembly plant?

With an investment of more than 7,000 million euros, the national territory will host important projects, among which the gigafactories and assembly plants of PowerCo Spain, Envision, Basquevolt, Stellantis, InoBat, FORD Almussafes and Phi4tech stand out.