We do not yet have a definitive explanation for the national blackouts in Spain and Portugal, but this has not stopped speculation on causes and inevitable politicisation of discussions[1]. Yet searching for a culprit technology may be asking the wrong question. Instead, the focus needs to be on ensuring the right tools are in place, and current EU energy market directions may not be achieving this.

Renewables are changing the system operation landscape

Major and rapid changes to the profile of the generation fleet are not new. For example, the ‘dash-for-gas’ period in England and Wales just before the start of the millennium saw an influx of very similar new gas-fired plants displacing coal generation, making a mockery of the carefully crafted pool scheduling rules designed around coal plant efficiency curves (and were possibly a major factor in the radical redesign of the market).

Nevertheless, the rate of penetration of renewables (mainly through solar and wind), which has accelerated in recent years, has undoubtedly led to several new operational complications. One key issue being that by displacing synchronous generators such as gas and nuclear, inertia on the system falls making changes in frequency more rapid.

Operators must have access to sufficient fast reserves and inertia  

Power systems must have adequate resources of the right types to cope with the system stability risks they face as wind and solar volumes increase.

Spain has very high levels of renewables penetration. For 2024, renewable energy is estimated to hold a 56% share including 23% of wind, 17% of solar and 13% for hydropower. The target for 2030 is 81%. At the time of the blackout, solar is reported as meeting 59% of demand and wind a further 12% leaving very little ‘space’ for fossil fuels.

Managing high SNSP[2] levels has been identified as a major concern in Ireland, which has developed a suite of designated inertia and fast frequency response services to manage the risk and currently limits SNSP to 75% in any Settlement Period. High SNSP significantly displaces fossil fuels and, although there is fairly significant hydro, it reduces availability of flexible generation, increasing reliance on France for additional flexibility.

Spain also has weak interconnections. According to the TSO, Red Eléctrica (REE)[3], the cross-border capacity between the Iberian Peninsula and continental Europe is 2% of installed power, far below the European Councils suggested 10% target for 2025. The link with France was congested 67.6% of the time in 2024. This gives Spain very limited ability to rely on support from other countries (for example, the large volumes of inertia embedded in France’s nuclear power plant fleet).

Limited battery energy storage. While Spain has 3,356 MW of storage capacity, of this 3,331 MW is pumped hydro with only very small quantities of battery energy storage systems (BESS), well below many other European systems. This is important in the context of a system that is low on inertia – while pumped storage is fast-responding it still does not deliver at the sub-second speed of BESS[4].

Figure 1  Battery storage in selected countries, 2023

Source: Eurostat

EU rules may be a distraction

The EU has been active in developing a single market in reserves provision as well as improved interconnection to provide the capacity for unimpeded delivery including for those reserves. But this focus on tradability, requiring a set of standardised products, may be distracting from the need to develop more tailored ancillary service products for individual markets.

The most relevant EU rule in relation to these issues is the Energy Balancing Guideline.[5] This creates markets in which TSOs can procure ancillary services and then offer them to other TSOs on a common platform. This covers balancing energy and reserves. The current focus is the Trans European Replacement Reserves Exchange (TERRE) designed for trade in standardised products for Replacement Reserve. Although the cause of the blackout in Spain and Portugal is not determined, it is unlikely that such traded Replacement Reserve would have prevented the problem given the reported speed of the failure[6].

Other EU Guidelines on transmission are:

• The System Operations Guideline (SOGL)[7] – provisions for restoration of power and processes for investigation but does not have defined processes in place for ensuring frequency and voltage stability preceding a fault.
• Requirements for Generators (RfG)[8] – which ‘helps to ensure fair conditions of competition in the internal electricity market, to ensure system security and the integration of renewable electricity sources, and to facilitate Union-wide trade in electricity’ through a set of fair generation connection rules.

How can markets be used to provide competitive fast reserve?

A possible model for Spain and others is provided by the initiatives in Great Britain and Ireland. The GB National Energy System Operator (NESO) publishes the Frequency Risk and Control Report (FRCR)[9] specifically to look at the risks of frequency deviations and measures needed to mitigate the risks, with specific review of the minimum inertia required. Meanwhile, EirGrid in Ireland is contracting for synchronous condensers.

Both markets have been active for several years in designing ancillary service products tailored to address the operational challenges posed by high renewable penetration. Since 2018 Ireland has paid a regulated tariff for Synchronous Inertial Response (SIR) as well as auctioning for fast frequency response[10]. Likewise, in GB the system operator has procured a series of enhanced frequency response products, accommodating BESS technical characteristics, since 2016 and is now commencing a new “stability market” directly procuring inertia support.[11]

While it is yet to be seen whether such efforts will successfully protect the GB and Irish systems from a similar outage event occurring as that in Spain, the focus on product design for system needs first, and markets for such products second, appears prudent.

[1]     Eg Fox Business

[2]     System Non-Synchronous Penetration

[3]     Red Eléctrica. Interconnections in our system  

[4]     European Energy Research Alliance

[5]     EU 2017/2195 Guideline on Electricity Balancing  

[6]     ENTSO-E

[7]     EU 2017/1485 System Operations Guideline

[8]     EU 2016/631 Requirements for Generators

[9]     Neso. 2024. Frequency Risk and Control Report

[10]    Eirgrid. DS3 Programme

[11]    Neso. Balancing Services