Today, the priority is no longer just to build new power plants, but adapt, strengthen and digitize the network so that it is capable of integrating renewable generation, new large industrial consumption, charging points for electric vehicles, data centers and, at the same time, guarantee security of supply, quality of service and competitive prices for households and businesses.
An electrical system designed for another time
The classic models of electricity transport and distribution They were planned decades ago for relatively predictable growth and an energy mix dominated by large conventional power plants. For a long time they worked well, but the situation has changed completely with the massive influx of renewables and new uses for electricity.
Transport network planning in Spain is generally carried out in multi-year horizons (development plans covering six-year periods), which made sense at the time. However, while networks evolve slowly, the Technological advances (Digitization, storage, demand management, distributed generation) are moving "at the speed of light" and are making classic planning schedules obsolete.
Furthermore, we are dealing with networks in which the Generation and consumption patterns change Energy is injected rapidly in a distributed manner, and numerous transient and random phenomena occur, which are difficult to anticipate with traditional models. This necessitates a rethinking of how both transmission and distribution networks are designed, operated, and expanded.
In this new context, the need to prioritize optimization of existing infrastructure before building new infrastructure, incorporating advanced monitoring, control, and data analysis systems. Network digitization is no longer an "extra" but a central element of planning.
At the same time, the social and economic pressure is clear: all productive activities and a large part of daily life require more electricity, preferably 100% renewableBut with a full guarantee of supply and at a competitive cost. The network must be the silent support that makes this transition possible without disruption.
Energy transition: more renewables, storage and flexibility
The electrical system is undergoing a process of structural transformation where mature technologies coexist with new renewable solutions and energy storage devices. The goal is to decarbonize the economy, electrify consumption, and simultaneously maintain system stability.
Among the key tools of this new stage are the following: reversible hydroelectric power plants (pumping), capable of storing large amounts of energy when there is surplus renewable production and releasing it when there is a shortage; the physical batteries, both at network scale and in industrial and residential facilities; and the growing ability of consumers to provide flexibility by modulating their demand.
The call active demand management This will allow households, SMEs, and industries to adjust their consumption to times of greater availability or lower price of renewable energy, reducing peak demand and helping to balance the system. This approach requires smart grids and well-designed market signal and pricing mechanisms.
We must not forget that we are talking about large electrical infrastructureswith significant technical complexity and a high territorial and environmental impact. Its design, sizing, and execution require highly specific profiles: electrical and energy engineers, data analysis specialists, environmental experts, and social communication professionals to manage the relationship with the surrounding community.
However, various studies, such as those carried out by business organizations in the sector, confirm a shortage of qualified technicians and of qualifications adapted to these new needs. This talent shortage could become a serious obstacle to the pace required by the energy transition.
Electricity planning in Spain: legal framework and process
The planning of the electrical infrastructures In Spain, it is heavily regulated. Law 24/2013, on the Electricity Sector, defines in its article 4 the procedure for preparing the plan and for modifying or adapting it when necessary.
This plan has two main parts. On the one hand, a part indicativeThis sets the target scenarios for generation and demand at the national level, in line with European and international commitments on energy and climate. This component is embodied in the Integrated National Energy and Climate Plan (PNIEC), which acts as a strategic compass for energy policy.
On the other hand, there is a part binding which focuses on the development of the electricity transmission network. It is governed by general principles established in Royal Decree 1955/2000 and by the guiding principles set out in the ministerial order that implements each new plan.
Transport network planning is a process open and regulated It covers a six-year period. It is drafted by the Government, with the participation of the autonomous communities, and its approval requires a report from the National Commission on Markets and Competition (CNMC) and a public consultation process. Before the Council of Ministers approves it, it is sent to the Congress of Deputies.
The fundamental objective of this plan is to determine the development needs of the network to guarantee security of supply, enable the connection of new generation (especially renewable), meet new consumption, increase efficiency by reducing losses and technical restrictions, solve congestion problems and plan both international interconnections and connections with non-peninsular territories.
Network plan development cycle and revisions
The process begins with the publication in the BOE of a ministerial order from the Ministry for Ecological Transition and the Demographic Challenge (MITERD), which gives a period of three months for interested parties to send their proposals for the development of the transport network.
From there, the system operator and transport network manager performs the technical studies necessary and prepares an initial proposal within a maximum of six months. This proposal is sent to the ministry, submitted to the CNMC for consultation, and a public hearing process is opened for at least one month.
After analyzing the CNMC report and the allegations received, MITERD forwards all the documentation to the operator so that, within a maximum period of two months, it prepares a new development proposalBased on this, the ministry has four months to formulate the final plan, again with a prior report from the CNMC, and submit it to the Government for approval.
In parallel, the plan must pass the procedure of Strategic Environmental Assessment regulated in Law 21/2013, which introduces another layer of review to ensure that new infrastructures meet environmental and sustainability criteria.
Law 24/2013 provides two ways to review the development of the network. On the one hand, exceptional measures can be approved, specific modifications by agreement of the Council of Ministers if certain circumstances arise: the appearance of unforeseen events that affect the security of supply, new supplies that can only be connected to the transport network, reasons of economic efficiency or critical facilities for the energy transition not foreseen in the current plan.
On the other hand, adaptations of character are permitted technical To implement the plans, which are approved by ministerial order, these adaptations adjust details of the layout, technology, or configuration of the facilities without altering the main axes of the planning.
It is still in effect today Transport Network Development Plan 2021-2026This plan has already undergone several specific modifications. Furthermore, work is underway on the new 2025-2030 plan, which is intended to mobilize a very significant volume of investment during this energy transition phase.
Economic sustainability, investment limits and remuneration
Electrical planning is subject to the principle of economic and financial sustainability of the system, as set out in Law 24/2013. This means that the costs of the facilities planned in the plan (mainly the remuneration of transport companies for building, operating and maintaining the networks) must be covered by the access tolls paid by consumers and by the charges associated with energy exports to non-EU countries.
The investment volume of the actions included in the plan that are eligible to be financed from these tolls is subject to a maximum limitRoyal Decree 1047/2013 currently sets this ceiling at 0,065% of nominal GDP for transport activity. Investments destined for international interconnections with countries of the European single market are not included in this limit.
This remuneration framework is key, because it conditions investor appetite: without a sufficient legal certainty And without a remuneration scheme that allows for the recovery of the investment within reasonable timeframes, companies have little incentive to accelerate the deployment of new infrastructure.
In recent years, an intense debate has opened up about the level of remuneration Suitable for the networks. The CNMC has proposed a rate of around 6,5%, higher than the previous 5,58% but lower than the 7,5% demanded by the sector. This difference reflects the tug-of-war between ensuring that the networks develop at the necessary pace and avoiding excessive impacts on electricity bills, given that consumers pay for these infrastructures through tolls.
Electricity companies have warned that if regulated profitability is not attractive enough, they could redirect investments towards other markets with more favorable frameworks, while the Government strives to achieve a balance between network development and end-consumer protection.
New government measures: strengthening networks and advance investments
Faced with the growing bottleneck in the electrical networks In Spain, the government has promoted a royal decree of urgent measures to strengthen the system. This regulation is accompanied by a new plan for the high-voltage network, which aims to mobilize around €13.500 billion by 2030, an unprecedented figure in this area.
One of the most relevant changes is the upward revision of investment limits in networks. Until now, the limit was set at 0,13% of GDP for distribution and 0,065% for transport. The Ministry's idea is to increase these thresholds to around 62% by 2030, temporarily, with the aim of unlocking projects and alleviating saturation.
The decree responds to a long-standing demand from the sector: the so-called anticipatory investmentsThese are actions that anticipate actual demand to prevent a single industrial consumer from having to bear the entire cost of a capacity expansion in a saturated area.
From now on, and under certain conditions, these investments will be able to to be attributed to planning in advance, provided they comply with clear and transparent criteria. In any case, these anticipatory actions may not exceed 15% of the additional investment margin granted to companies.
As a counterpart to this wider margin, the Government is strengthening the control mechanismsThe main distribution and transport companies will have to publish details of their investment plans, justify their access decisions (why one consumer is connected and not another) and submit their actions to audit to explain the differences between planned and actual investments.
Ministerial control, working group and network resilience
This new framework gives the Executive a more active role in the monitoring of critical infrastructure which has proven key to the country's industrial future. The minister and the Secretary of State for Energy have stressed the need to prevent speculation with access permits and to prioritize projects with the greatest real impact on the territory.
To that end, the creation of a working group To optimize network capacity, representatives from the Ministry, major electricity companies, and the CNMC will participate. This forum will attempt to better coordinate regulatory decisions, business investment plans, and system needs.
At the same time, the Council of Ministers has approved a list of specific actions to strengthen the resilience of the transport network, which are incorporated as a new specific modification to the 2021-2026 Plan. These are some 65 actions aimed at improving voltage control, stability against oscillations and, in general, the reinforcement of the system both in the Peninsula and in the Canary and Balearic Islands.
These investments include the incorporation of advanced tools in the network (reactive compensation, stability devices, automation, etc.) that allow better management of energy flows, reduce the risk of blackouts and adapt to an increasingly renewable and decentralized mix.
The underlying logic is clear: in a system with more intermittent generation and more critical electricity consumption, the network resilience It ceases to be a "nice to have" and becomes a political and economic priority.
Access collapse, connection point saturation, and delays
Although the official discourse insists that Spain is experiencing a great investment opportunity Linked to electrification and renewables, the current reality is that infrastructure has not grown at the same pace as demand. The result is a considerable backlog of projects.
Since 2020, more than 43 GW of capacity has been allocated for industrial use, data centers, and charging points—a figure equivalent to the country's historical peak demand (around 45 GW). However, the distribution and transmission network has not been reinforced at the same pace, leading to increasing saturation.
Industry data suggests that around 83,4% of access points The distribution network (medium and low voltage) is already saturated. In more than thirty provinces, there is hardly any room left to connect new inverters, and regions such as the Basque Country, Andalusia, Aragon, and Cantabria are practically overwhelmed, with almost 100% of their capacity allocated.
Furthermore, the administrative process for obtaining access and connection permits can be prolonged during more than seven years In some cases, this applies to large projects, which discourages investment and jeopardizes the achievement of decarbonization goals. Even a small or medium-sized enterprise (SME) that simply wants to increase its contracted power or obtain a new supply point can spend between four and six months on paperwork.
This bureaucracy has become a serious obstacle to new industrial and energy developments. In fact, the government itself acknowledges that there is a bottleneck that threatens investments up to 100.000 billion euros if network capabilities and administrative procedures are not unlocked quickly.
Growing electricity demand and investment needs in distribution
Projections for the next decade point to a sharp increase in electricity demand national. A study by the Technological Research Institute (IIT) with the consulting firm EY, prepared for the electricity employers' association AELEC, estimates that consumption could grow between 33% and 54% until 2030, reaching about 360,8 TWh per year.
In the most ambitious scenario, demand could even double by 2035, driven by the electrification of industry, the widespread adoption of electric vehicles, and the proliferation of data centers and other large, energy-intensive consumers.
The same study details that this growth will exert a special pressure on medium and high voltage networksThese companies are responsible for channeling electricity to industrial centers, business parks, and urban hubs. The distribution network must adapt to both new consumption patterns and increased distributed generation (self-consumption, energy communities, etc.).
To assess the needs, the IIT has developed a model that estimates the investment required in the distribution network to connect new consumers, replace old assets, and advance digitalization. Its findings point to the need to invest between 4.500 and 6.300 million euros annually until 2030, figures that reasonably fit with the limits proposed by MITECO in the draft Royal Decree of September.
Representatives from energy-intensive sectors have expressed their concern about the current limited network capacity and due to the high volume of pending access requests. The report emphasizes that, if the necessary investments are not made in time, the distribution network could become the main bottleneck for meeting the 2023-2030 National Integrated Energy and Climate Plan (PNIEC) objectives regarding the energy transition.
Infrastructure investment as an opportunity for investors
Beyond the regulatory and technical aspects, the structural trends that drive investment in infrastructure (electrification, digitalization, resilience, energy security) also open up an attractive playing field for investors in capital markets.
Massive investment plans, such as the program of €500.000 billion infrastructure projects in GermanyThe rise of artificial intelligence with its enormous power and cooling needs, or national strategies to strengthen generation, storage and networks, are generating a constant flow of projects and opportunities.
Given this scenario, some investors might think that the best way to take advantage of this wave is to bet on cyclical and more volatile infrastructure assets (for example, linked to transport or raw materials), seeking to capture greater potential growth, although at the cost of assuming more risk.
However, this strategy comes at a cost: it can dilute precisely those advantages that make the infrastructure in a defensive component of portfolios, such as downside protection, inflation hedging, and cash flow stability.
Furthermore, there is a false dichotomy between investing only in low-growth defensive utilities (traditional public utilities) or in infrastructure companies with high potential but high volatility. The reality of the publicly traded infrastructure universe is much richer and more nuanced.
Regulated utilities: stable growth, regulation and incentives
The universe of investment in listed infrastructure is broadly divided between companies with a more cyclical exposure (for example, transport linked to global trade, companies linked to raw materials) and companies with a more stable profile, such as regulated utilities, which represent the most defensive segment of the sector.
Interestingly, the increase in global infrastructure spending will primarily benefit this second group, as they are the regulated electricity utilities These are at the heart of major structural trends: electrification of demand, network modernization, resilience, and digitalization.
Regulators are well aware that this growth is critical for the economy as a whole. That's why they are incentivizing utilities to continue investing in expansion, raising the permitted returns or incorporating additional incentive mechanisms for efficiency and quality of service.
Furthermore, the commitment of governments to the modernization of networks and systems This translates into specific budgets for electrification, capacity reinforcements, automation, and supply resilience. New generation plants, both renewable and conventional, need to be connected to the grid and often require grid upgrades to handle increased demand and more energy exchanges.
Resilience has gained importance after episodes like the blackout reported in Spain or other international incidents. This has driven, for example, an increase in capacity payments to integrated utilities, which receive additional compensation for ensuring that energy will be available when needed, especially during periods of peak system demand.
European examples: Germany and regulatory frameworks with incentives
The case of Germany is illustrative of how the transition to electrification It can be more complex in countries with a strong historical dependence on fossil fuels for thermal uses, such as heating. There, the electricity grid urgently needs upgrades to connect new energy sources and strengthen existing connections in the face of growing demand.
This situation will force Germany to invest intensively in their networks in the coming years, creating a favorable context for the regulator to revise upwards the returns allowed to utilities, so that they have sufficient incentives to undertake these investments.
In other European countries, such as Italy, the United Kingdom, or Germany itself, many regulatory frameworks incorporate performance incentives that allow utilities to obtain returns higher than the benchmark rates if they improve their operating efficiency or finance themselves at a lower cost than the rate used by the regulator.
In practice, this means that better-managed companies can exceed authorized base returnseven though these may not seem particularly high at first glance. The key lies in their ability to execute projects efficiently and take advantage of regulatory incentives.
From an investment perspective, focusing on regulated utilities that They reinvest a significant portion of their cash flow To grow —instead of just distributing dividends— it can offer a very attractive combination of stability, growth and increasing income over time, without having to assume the cyclicality of other infrastructure assets.
In this scenario, the real opportunity does not lie solely in pursuing the higher immediate dividendsbut rather in identifying stable companies that benefit from major infrastructure investment trends, generate recurring revenue, and use reinvestment as a lever for long-term value creation.
The entire ecosystem of investments in electrical infrastructure The energy sector is being reconfigured at breakneck speed: more complex but more transition-oriented regulatory frameworks, upward revisions to investment limits, smarter and more resilient grids, and soaring electricity demand driven by electrification and digitalization. Understanding how these pieces fit together—from government planning to utility incentives and industry needs—is crucial for designing effective policies and enabling businesses and investors to capitalize on the wave of opportunities while ensuring system stability and consumer protection.
