Positioning of Foro Industria y Energía (FIE) on the Government Report on the Power Outage of April 28, 2025

June 20, 2025

The recent publication of the report by the Committee analyzing the power outage of April 28, 2025, has been received with great interest by the industrial sector. For Foro Industria y Energía (FIE), this document, far from dispelling all concerns, introduces new layers of complexity into the already challenging task of energy planning and management for industrial companies.

Persistent uncertainty for industrial investment

From the industry’s perspective, uncertainty is a direct enemy of investment. As FIE has stated on previous occasions, “uncertainty kills industry.” Strategic decisions on electrification, decarbonization, and energy efficiency require a predictable regulatory and operational framework. Unfortunately, the report, with its analysis of a complex “multifactor event,” while shedding light on some technical aspects, fails to offer the clarity companies need to confidently make their next major energy investments.

The lack of a simple and compelling explanation of the chain of events and the technical nature of the conclusions may, paradoxically, increase mistrust. Do we have all the data? The existence of different versions of the document with varying levels of information adds a concerning unknown for the industry: Have companies received the “complete” version with the most comprehensive information, crucial to understanding the real state of the system and planning our energy future? This opacity, even if partial, harms investor confidence.

Added to this is the confusion created by multiple official sources offering different diagnoses of the event. While this analysis focuses on the Government’s report, Red Eléctrica has published its own analysis with differing conclusions that also point to structural issues, and the CNMC is working on its own review. The lack of a single validated narrative reinforces uncertainty and feeds distrust among industrial actors.

The industrial sector needs clear signals about the direction of the Spanish energy system. If the causes of an outage, however complex, are not presented with a level of transparency that enables unequivocal understanding of the solutions, investment restraint will remain the prevailing trend. If it is already difficult to decide under “normal” conditions, imagine how hard it becomes in extraordinary circumstances beyond the industrial world’s comprehension.

Beyond technical analysis: key points for energy management in industry

As Foro Industria y Energía, we acknowledge that the detailed technical analysis of the report exceeds our analytical capabilities, and that it is the responsibility of the competent authorities to meet their transparency obligations by communicating “clearly, in a structured and understandable manner to stakeholders” (Art. 5.4 of Law 19/2013, of December 9, on transparency, access to public information and good governance). Our mission, however, is to interpret the consequences of this document for industrial energy management and the impact on investment decisions.

Despite the general uncertainty, the report, between the lines and in its proposals, does highlight points that are crucial for the industrial energy future and that must be taken into account:

• Renewables as part of the solution: The report does not place blame on renewables for the incident. While it identifies challenges in their integration (such as voltage control and the need for better response to fluctuations), the path to decarbonization through renewables remains unchanged. It stresses the need for renewable facilities, particularly photovoltaics, to actively participate in voltage control and better respond to grid oscillations. The report notes that, although renewables have the “technological capacity to operate on command,” current regulations do not require it. To accelerate this improvement, it proposes a “Boost Plan for repowering renewable projects, facilitating the replacement of older equipment with modern ones that incorporate the latest requirements for control, management, and system resilience.”

• Government commitment to industrial electrification: The incident has not slowed support for electrification as a central axis of decarbonization. The report and the subsequent measures reaffirm this commitment.

• Grid planning, key for industrial demand: The need to strengthen the grid and its planning is underlined, which is being addressed through the launch of the upcoming 2030 horizon transmission grid plan, prioritizing industrial consumption. Measures such as the “activation of access capacity auctions for this type of installation” and the “expiry of unused access permits to prevent artificial grid blockages and allow mature and solvent projects to move forward” are also being considered. For industry, this could translate into greater supply security and capacity to connect new loads and distributed generation.

• Recovery, Transformation and Resilience Plan (PRTR): The report reinforces the importance of PRTR funds. Specifically, it mentions a €931 million investment allocated to financing transmission grid upgrades to minimize the impact of these investments on consumers’ final energy bills, which could mean more affordable energy access for industry.

• Necessary regulatory revisions: The need to adapt the regulatory framework is evident. This includes the “revision of technical parameters” and the “redefinition of the capabilities that generators and demand must provide.” It also proposes the “review of investment limit regulations in grids, linking this review to the obligation for distribution grid operators to incorporate specific actions for industrial electrification in their investment plans, as well as open and transparent processes that allow industry to express its demand needs.” For industry, this could mean new opportunities to actively contribute to system stability, for example, through demand-side management.

• Promotion of electricity storage: The commitment to storage is reaffirmed as a crucial tool for system stability and flexibility. This may open the door to large-scale and potentially industrial-level storage solutions, improving supply security at industrial sites.

• Incentives for demand-side flexibility and ancillary services: The report emphasizes the need to improve the operability and visibility of distribution grids and the participation of distributed resources in system management. It proposes the “inclusion of flexibility targets in national sectoral regulations” and the “approval of independent aggregator regulation, aimed at maximizing the number of potential agents participating in flexibility systems.” This implies that industry, with its ability to adjust consumption, invest in storage, or manage its generation assets, could be a key player in providing ancillary services such as voltage control or rapid response, which should be incentivized through new market frameworks.

• The link between market prices and voltage: The report notes how low or negative prices can lead plants (including thermal or cogeneration units) to reduce reactive power absorption or even disconnect. This behavior contributed to overvoltages. This is a key point for industry, which cannot be a passive actor in this scenario. To avoid being at the mercy of others’ decisions, it must inevitably become part of the solution by monitoring market signals to understand their impact not only on cost but also on system stability and its own consumption.

FIE conclusions:

Foro Industria y Energía has drawn the following conclusions after analyzing the Government’s report:

• The report, while technical and necessary, does not dispel the uncertainty essential for industrial investment decisions and may even increase it due to perceived opacity. As we have noted in numerous articles, uncertainty is likely the greatest enemy of industrial development and investment in key areas such as energy management.

• The unknown surrounding the availability of the uncensored, full version of the report for the industrial sector is fundamental and must be addressed to build trust. Is Spanish industry, as the main consumer, truly informed of this?

• The coexistence of multiple reports, such as the one by Red Eléctrica with different conclusions pointing to structural problems, the upcoming analysis by the CNMC, and the absence of a unified narrative of the incident, intensifies confusion and mistrust in the industrial sector regarding the reliable information needed to assess the system’s real risks with confidence.

• “It is essential to strongly support industrial investments in self-consumption, with a stable regulatory framework and an economic plan that truly encourages this commitment by the productive sector,” says Eduardo Álvarez, technical director of FIE and professor at the University of Oviedo. In this context, it is necessary that support measures are not limited only to the grid domain but also accompany and support the industry’s investment efforts in its own solutions.

• Renewables are not to blame, but their integration requires significant improvements in their ability to provide services to the system (voltage control, damping of oscillations) and regulation that encourages it.

• The commitment to electrification and system resilience is reaffirmed—pillars for industry—supported by €931 million from the PRTR for grid reinforcement. However, beyond this investment, no new funding specifically related to the outage has been announced. This amount was already part of previously planned and communicated investments. Therefore, while this measure may help prevent similar situations in the future, it has not generated new investment lines arising specifically from the crisis.

• Industry cannot afford to be a passive actor in the management and evolution of the energy system. To avoid being subject to external decisions and ensure its own energy future, it is imperative that it takes an active and proactive role in shaping a more stable and resilient framework. Industry must demand stable and clear regulatory frameworks that encourage investment and its participation in the energy transition, prioritizing the streamlining of access to and use of the grid for industrial demand.

Regarding the consequences for industrial energy management, these are:

• Need for greater internal resilience: investing in on-site self-consumption, storage, and smart demand management solutions will be more critical than ever, given the system’s complexity and the regulatory drive for storage.

• Adaptation to new technical requirements: future investments in renewables or industrial consumption must align with new regulatory requirements.

• Greater need for digitalization and monitoring: to participate in ancillary services and optimize energy management, industries must invest in advanced monitoring and control systems that allow more granular, real-time interaction with the market.

• An urgent need for more robust and transparent grid planning that ensures connection capacity and stable supply for industrial growth, leveraging the investment already planned for the transmission and distribution grid. Although decisions on these investments are not, of course, in the industry’s hands, it should be a constant demand if we truly want industry to advance toward electrification.