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Grid Constraints in Iberia: A Curtailment Threat or a Storage Opportunity?

In light of the government targets planning 74% and 80% of electricity generation from renewables in Spain and Portugal, respectively, the risk of curtailment will grow for renewable developers. Furthermore, a rapid renewable buildout might exacerbate the need for costly actions needed to ensure grid operability.

Technical Restrictions is an Ancillary Service in which the Transmission System Operator solves location-specific grid constraints by re-dispatching programming units. The market is separated into two phases, with the first phase of Technical Restrictions markets involving generation curtailment. However, participation in the Technical Restrictions market can still provide an important upside, especially for storage assets, depending on the location.

In April 2022, we saw the first solar PV curtailment in Spain, which we expect to become more common given the expected increase in renewable capacity coming online. Therefore, it will become more important to understand curtailment risk when making investment decisions.

To assess this risk and evaluate the potential opportunities, in this webinar our Iberia team discuss the following:

  • How does the Technical Restrictions market work?
  • What services are currently procured through the Technical Restrictions market?
  • What are the drivers of the Technical Restrictions market?
  • How could renewables be impacted by this curtailment threat?
  • Can batteries benefit from this additional revenue by replacing thermal generation?

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