The Spanish government will allocate 280 million euros ($310 million) for stand-alone energy storage, thermal storage and reversible pumped hydro storage projects, which are due to come online in 2026.

Last month, Spain's Ministry of Ecological Transition and Demographic Challenges (MITECO) launched a public consultation on the grant program, which has now launched grants and will accept applications for different energy storage technologies in September.

MITECO has launched two programmes, the first of which allocates €180 million for stand-alone and thermal storage projects, of which €30 million for thermal storage alone. The second plan allocates €100 million for pumped hydro storage projects. Each project can receive up to 50 million euros in funding, but thermal storage projects are capped at 6 million euros.

The grant will cover 40-65% of the cost of the project, depending on the size of the applicant company and the technology used in the project, which can be stand-alone, thermal or pumped hydro storage, new or existing Hydropower, while universities and research centers receive grants for the full project cost.

As is usually the case with tenders in Spain, the overseas territories of the Canary Islands and Balearic Islands also have budgets of 15 million euros and 4 million euros respectively.

Applications for stand-alone and thermal storage will be open from September 20, 2023 to October 18, 2023, while applications for pumped storage projects will be open from September 22, 2023 to October 20, 2023. However, MITECO did not specify when the funded projects would be announced. Standalone and thermal storage projects need to come online by June 30, 2026, while pumped storage projects need to come online by December 31, 2030.

According to PV Tech, Spain recently updated its National Energy and Climate Plan (NECP), which includes increasing the installed capacity of energy storage to 22GW by the end of 2030.

According to an analysis by Aurora Energy Research, the amount of energy storage Spain is looking to increase would require adding 15GW of long-duration energy storage over the next few years if the country is to avoid economic cuts between 2025 and 2030 .

However, Spain faces major obstacles in increasing large-scale long-term energy storage, that is, the high cost of long-term energy storage projects, which has not yet reached the latest NECP target.

Eligible projects will be judged on factors such as economic viability, ability to help integrate renewable energy into the grid, and whether the development process will create local jobs and business opportunities.

MITECO has also launched a similarly sized grant program specifically for co-location or hybrid energy storage projects, with proposals due to close in March 2023. Enel Green Power submitted two compliant projects of 60MWh and 38MWh in the first quarter.