AleaSoft Energy Forecasting, August 7, 2026. The transition towards an electricity system with more renewable generation does not only transform the way electricity is produced. It also changes the resources the system needs to keep frequency and voltage within safe limits, and with them the value that batteries, renewable energy and industry provide.
Active power and reactive power, two distinct functions
The electricity that flows through the grid includes active power and reactive power. Active power supplies consumption and enables useful work. Reactive power contributes to voltage control and is essential for the grid to operate safely. A facility can produce few megawatt hours at a given moment and, at the same time, provide a valuable service by generating or absorbing reactive energy.
This capability gains weight in a system with high renewable production, since solar and wind generation concentrates in certain hours and areas while demand and grids follow different profiles. ENTSO-E considers that the stability of a system with a growing presence of inverter-based resources is a priority, and calls for greater capacity to detect and control these deviations.
The CNMC redefines remuneration for voltage control
The CNMC approved a change to the electrical operating procedures PO 7.4 and PO 14.4 to encourage a more dynamic provision of the voltage control service and to encourage the participation of renewable facilities. The reform introduces a fixed-setpoint mode, which allows generation and energy storage facilities with a capacity equal to or greater than 1 MW to take part even if they do not yet have communication systems to receive real-time instructions.
The new regulation also increases remuneration for real-time setpoint tracking and recognises the hours in which a facility provides reactive power without producing active energy. The underlying message is clear. The value of an electricity asset no longer depends solely on the energy it produces, consumes or stores. It also depends on its capacity to respond to the grid’s needs.
Batteries, hybrids and industry widen the pool of flexibility providers
Solar and wind plants can use their inverters to take part in voltage control if they meet the technical requirements. Batteries can combine price arbitrage and participation in balancing services with the provision of reactive power, while hybrid facilities coordinate several resources from a single connection point.
Industry can also take on an active role. The CNMC is running a pilot project until 2027 in which large consumers control voltage by absorbing reactive energy, in exchange for variable remuneration and grid access charge exemptions, and has launched a new project with consumers and distributors. A factory, a data centre or an electrolyser can provide flexibility if their processes allow it and the regulation maintains technological neutrality.
Profitability, forecasting and location, the new investment variables
Greater renewable participation in voltage control can reduce the need to schedule combined-cycle plants for technical restrictions, although dispatchable generation will remain necessary, since no single resource covers frequency, voltage, inertia and recovery needs on its own. The final report by ENTSO-E on the electricity incident of April 28, 2025 confirmed this reading, identifying shortcomings in voltage control among the factors behind the event, and recommended strengthening oversight and regulatory coordination.
Reactive power needs depend on each grid area, which is why the CNMC has asked Red Eléctrica to publish regular information on zonal needs. Developers will also need to anticipate renewable production, demand and electricity market prices, because a battery or a hybrid plant cannot optimise each market and service in isolation.
The role of AleaStorage in the new revenue architecture
In this context, AleaStorage, the division of AleaSoft Energy Forecasting specialised in energy storage, helps developers and operators assess these new revenue sources. AleaStorage estimates the revenues of stand-alone batteries and hybrid batteries in energy and balancing service markets, analyses hybridisation projects with solar and wind to maximise revenues and reduce risks, and models long-term price and volatility scenarios that make it possible to anticipate the value of reactive power and flexibility at each grid node.
Source: AleaSoft Energy Forecasting
