Spain Faces Unprecedented Electricity Overbooking Threatening Sector Stability

Spain is currently experiencing an unprecedented situation of overbooking in its electricity networks where Red Electrica and distribution companies have granted more capacity than the actual infrastructure can support.

This over-assignment is creating significant uncertainty for investors and project developers especially in industries new residential developments and data centres. Unlike denied connection permits where operators know they cannot connect and can adjust their plans overbooking leads to projects proceeding under the assumption they have secure access to electricity supplies.

This situation is comparable to travellers with tickets who are turned away because the flight is full or to lottery ticket sellers overselling more tickets than available. The risk is that many projects will face operational or legal issues as they rely on permissions now called into question.

The core issue stems from inconsistencies in capacity measurement and regulation. Since late 2025 the National Commission for Markets and Competition CNMC introduced new standards to measure available capacity moving from static to dynamic zonal criteria. This change exposed existing overassignments with certain nodes connection points showing capacity shortages of up to 100 MW due to overestimations.

Red Electrica has expanded its network by connecting more clients upstream in recent years often without full coordination with distribution companies. This has effectively reduced capacity downstream worsening the overbooking problem. The operator's aggressive strategy to connect large consumers directly to the transmission network has further strained the available capacity bypassing established regulatory limits.

While regulation historically focused on new generation plants the rise in demand from large consumers and lacking oversight on capacity for new loads has created a regulatory gap. The Ministry for Ecological Transition recently proposed measures to regulate and manage connecting demand including electronic data centres to ensure capacity is allocated fairly and effectively. This initiative aims to release unused capacity currently locked due to regulatory shortcomings.

If timely regulatory measures are not implemented the industry risks a surge in legal disputes and project cancellations. The sector faces a critical challenge to recalibrate capacity measurement and establish clear consistent rules to ensure sector stability and support the decarbonisation agenda without jeopardising supply reliability.