June 2, 2026
One of the control rooms of Spain’s TSO Red Eléctrica, which will use the mechanism to procure energy for periods of scarcity. Image: Red Eléctrica.
The European Commission has approved a €9 billion (US$10.5 billion) scheme to shore up its energy capacity, which will be open to new and existing projects including energy storage.
The mechanism is akin to a capacity market (CM) and will run for ten years from May 2026 at €900 million a year. It aims to ensure that there is sufficient capacity to produce, store or flexibly consume electricity and that electricity production meets the expected demand.
Under the mechanism, transmission system operator (‘TSO’) Red Eléctrica will remunerate the capacity needed to meet the maximum acceptable hours of lost load per year that the system must meet to ensure adequate security of supply (known as the reliability standard).
