The European Commission has approved Spain’s new capacity mechanism, which is expected to mobilise up to EUR9bn between 2026 and 2036 (European Commission press release, 29/05/2026). Under the scheme, electricity resources will receive remuneration for being available during periods of system stress or supply scarcity, including power generation, storage, and demand-side response resources.
The scheme will be administered by Red Eléctrica de España (REE), Spain’s system operator. Capacity payments will be granted for resources needed to comply with the national reliability standard, which represents the maximum acceptable number of hours of lost load per year required to safeguard security of supply. This standard is based on Spain’s resource adequacy assessment and has been validated by the Agency for the Cooperation of Energy Regulators (ACER).
Capacity will be allocated through competitive, transparent, and non-discriminatory auctions. Participants will compete according to the level of remuneration they request per MW of available capacity during scarcity periods. According to the press release, this approach is designed to minimise market distortions, while lowering costs for consumers.
The measure is expected to have an annual budget of approximately EUR900m, resulting in a total estimated value of around EUR9bn over the 10-year period, depending on the outcome of each capacity auction.
Furthermore, the scheme will be open to projects located in Spain. According to the European Commission, Spain aims to enable participation from all other interconnected Member States as soon as possible.
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