Renewable Energy Projects in Spain Are Facing A Wave Of Bankruptcies

 

Renewable energy projects in Spain are facing a wave of bankruptcies, with 70% of energy storage projects facing cost reductions and grid bottlenecks, resulting in project returns falling short of expectations.

 

The Spanish renewable energy industry is facing severe challenges, with project economics generally struggling to balance. Industry insiders point out that grid-connected, operating assets are generating insufficient returns due to excess power and low market prices, while standalone energy storage projects are also struggling to achieve profitability under current conditions. Raúl Rodriguez, Development Director of Engi Spain, stated that the industry has hit rock bottom and must seek a breakthrough through bankruptcy, bailouts, refinancing, or asset write-downs.

 

At the Third Energy Transition Forum, hosted by Energy Daily, Belén López, Renewable Energy Director of Nostrum Group, revealed that project returns are plummeting, driven not only by low prices but also by the continued expansion of excess power and sluggish demand growth. Luis Garcia, General Manager of Contigo Energy, emphasized the importance of addressing excess power in congested areas of the grid, necessitating refinancing or write-downs to maintain future viability.

 

Daniel Garrido, Renewable Energy Director of Efage Energy Systems, noted that low returns have stalled installation and anticipate a wave of project bankruptcies. He particularly mentioned that most demand centers are located in rural areas without absorption capacity, while load-concentrated areas lack power generation resources, and priority should be given to investing in grid interconnection infrastructure. To improve profitability, developers are exploring two options: hybrid deployment and energy storage. Marta Fernandez, business development director of Acoya Energy, said that current battery prices still put pressure on the economics of projects, and project development is generally delayed without subsidies. Lopez of Nostrum Group added that although battery prices have fallen by 70%, the cost structure still needs to be further optimized, and currently it still needs to rely on subsidies and financial support. The industry consensus is that the capacity market mechanism can provide investment signals, but as Garrido said, progress in all links is currently lagging behind and urgently needs to be accelerated.