The European Commission approved, on Friday 29 May, a €9 billion Spanish capacity mechanism for a 10-year period with the aim of ensuring that there is sufficient capacity to produce, store or flexibly consume electricity, under the ‘CEEAG’ guidelines on State aid for climate and energy, applicable since 2022 (see EUROPE 12858/2).
Under this market-wide mechanism, the electricity transmission system operator will remunerate all the capacity needed to comply with the reliability standard, namely the maximum acceptable hours of lost load per year that the system must meet to ensure adequate security of supply. Lost load is the amount of electrical demand that cannot be met due to supply interruptions.
The Spanish mechanism will be open to all projects, existing or new, that offer to be available during periods of shortage. These projects include electricity generation, a commitment to reduce consumption, storage and flexibility services. The beneficiaries will be selected following a competitive bidding process for their offers through capacity auctions valued at €900 million per year.
Spain will endeavour, “as soon as possible”, to allow companies from other interconnected Member States to participate in the mechanism, the Commission states.
According to the Commission, the Spanish mechanism is necessary, appropriate and proportionate insofar as the aid intensity corresponds to the needs expressed and the measure is aligned with the priorities of the ‘CISAF’ framework stimulating investment in clean technologies until the end of 2030 (see EUROPE 13667/26). (Original version in French by Mathieu Bion)