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Spain Spends €435 Million on Demand-Response to Avert Power Cuts

Regulators are updating rules as costs from paid factory curtailments rise

Overview

  • The nationwide blackout on April 28, 2025 had a multifactorial origin with no single cause and spurred a push to boost system reserves.
  • Red Eléctrica says it has spent more than €435 million this year on an Active Demand Response service and estimates the program prevented roughly ten power cuts.
  • About twenty large industrial sites are paid to be ready to stop or reduce electricity use, and they receive additional payments each time the operator activates the service.
  • Use of the mechanism has surged since July with multiple activations that could drive up the price factories demand to offer curtailment and raise charges passed on to consumers in 2027.
  • Regulators are still adapting rules, leaving residual fragility in the grid, and the next rounds of auctions and rule changes will shape future costs and the system's ability to avoid another large blackout.