AleaSoft Energy Forecasting, June 25, 2025. Spain’s electricity system has changed dramatically over the past two decades with the rise of renewables and self‑consumption. However, the grid has not always kept pace. In a context of distributed generation and bidirectional flows, modernising the grid, digitalising infrastructure and strengthening planning are urgent to ensure stability and progress towards a 100% renewable system.
Two decades ago, Spain’s electricity system was based almost entirely on a centralised model. Large thermal, nuclear and hydroelectric plants generated electricity, which was delivered to consumers via transmission and distribution grids designed for one‑way flows. Today, however, that system has changed profoundly. But has the grid infrastructure that supports it evolved at the same pace?
From a passive grid to a complex system
No, it is no longer the same electricity system. While the transmission and distribution grids remain the backbone, their role and demands have changed dramatically. The grid no longer simply delivers electricity from large power plants to households. It must now manage input from millions of decentralised generators, from large‑scale solar and wind farms to residential self‑consumption installations.
Over the past 20 years, renewable energy generation has grown from accounting for less than 20% of annual electricity production to exceeding 50%. Self‑consumption has also seen a remarkable surge: from being anecdotal, it has become an unstoppable trend, with hundreds of thousands of rooftops now generating electricity. According to data from APPA, the Association of Renewable Energy Companies, in 2024 self‑consumption covered 3.7% of national electricity demand, compared to just 0.1% in 2017.
And what about the grid? Has it grown at the same pace?
In physical terms, the grid has expanded. New transmission lines, interconnections and substations have been deployed. As materialist dialectics puts it, “quantitative changes lead to qualitative changes”, a principle that applies to the electricity system. It is not just that the grid is larger; it has also changed in nature compared to 20 years ago, when wind and solar energy were not yet part of the energy mix.
However, this growth has not always kept pace with the rise of distributed generation or the system’s new requirements. Many distribution grids still operate with an architecture designed for the 20th century, lacking the flexibility and digitalisation required by the new paradigm.
Investment has taken place, but it has not been sufficient. Large interconnection and transmission reinforcement projects have been prioritised, while relatively little has been invested in adapting distribution grids, which are the most affected by the growth of self‑consumption and distributed generation.
Protection and stability: new challenges
The protection system has also had to adapt. Traditional unidirectional protection logic has been replaced by more complex configurations capable of managing bidirectional flows, renewable intermittency and rapid variations in voltage and frequency. However, many grids still lack modern protection systems suited to these new operating conditions.
As a result, instability has increased. Not because renewable energy is inherently “unstable”, but because the system was not prepared to integrate it on a large scale without accompanying the transition with investment in smart grids, automation, energy storage and demand management.
How can it be improved?
To move towards a more stable power system adapted to today’s reality, it is essential to accelerate investment in grid digitalisation. This includes the deployment of remote control systems and real‑time management tools that enable more dynamic and intelligent operation. It is also crucial to modernise protection systems, equipping them with adaptive logic and the ability to manage momentary outages and bidirectional flows which are essential features in an environment with high renewable energy penetration.
Investment in energy storage, both at grid scale and through behind‑the‑meter solutions, is becoming vital to absorb surplus generation, manage imbalances and support system stability. In parallel, planning must be coherent. It is not enough to approve new renewable capacity if there is no available grid infrastructure to evacuate and manage that energy. Finally, active demand management must be promoted, encouraging consumer participation in system flexibility by adjusting their consumption to help maintain system balance.
The grid, a strategic pillar of the energy transition
The energy transition is not just about renewable energy generation. It also requires a robust, intelligent and future‑ready grid. The energy system is no longer what it was 20 years ago, but the grid has not always evolved at the same pace. It is urgent that energy planning places grid modernisation at its core if the goal is a fully renewable and stable future.
AleaSoft Energy Forecasting’s tools for energy management and the development of storage projects
AleaSoft Energy Forecasting, through its AleaBlue division, provides short- and mid‑term electricity market forecasts. These forecasts are essential tools for energy management, planning, offer preparation, risk management and hedging strategies. Demand forecasts are also produced, as well as price forecasts for ancillary services and intraday markets. The latter are particularly useful for price arbitrage involving energy storage systems.
Meanwhile, the AleaStorage division specialises in the analysis of energy storage projects. Its services include studies to estimate revenues and profitability, optimise battery sizing in hybrid systems with renewable energy and assess different business models associated with energy storage.
Source: AleaSoft Energy Forecasting.
