The Spanish energy storage market has a new benchmark for battery financing. Return and ENGIE have signed a ten-year full tolling agreement to develop three storage projects in the Basque Country , a formula that aims to reduce uncertainty about revenue and improve the bankability of this type of asset.
The agreement comprises three facilities totaling 55 MW of power and 220 MWh of capacity , whose entry into commercial operation is planned for the end of 2027.
Under this scheme, Return will own, develop and operate the storage systems , while ENGIE will manage the flexible battery capacity in the wholesale and adjustment services markets of the Spanish electricity system .
Beyond the announced capacity, the move is significant because of the type of contract chosen. The full tolling model guarantees greater revenue visibility for the asset owner , while allowing the buyer to have storage capacity to optimize their energy portfolio over an extended period.
In a market where the profitability of batteries continues to depend largely on the revenue obtained in different electricity markets, this type of agreement is beginning to emerge as an alternative to unlock large-scale investments.
One more step towards bankability of storage
The operation comes at a time when the Spanish market is looking for mechanisms to reduce the financial risk associated with storage projects.
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The growth of renewable generation, the increased volatility of electricity prices, and the need to incorporate flexibility into the system have increased interest in contracts capable of offering long-term income certainty .
According to the companies, the agreement will allow Return to finance new developments with greater predictability, while ENGIE will incorporate flexible capacity to strengthen its energy management activity and advance its carbon-free energy supply strategy.
Batteries to support renewable growth
The three projects will be located in the Basque Country and will aim to store surplus renewable generation when there is high production and return that energy to the system at times of higher demand , contributing to the balance of the grid.
The current context favors these types of solutions. Spain continues to increase its renewable energy capacity and, at the same time, is experiencing increased demand associated with the electrification of industry, transportation, and new energy-intensive sectors, such as data centers.
In this scenario, storage is consolidated as one of the key elements to manage the growing variability of the electrical system and reduce renewable energy spillovers.
The agreement also expands the collaboration that both companies already maintained in Germany and makes Spain the second European market where Return and ENGIE apply long-term full tolling contracts for storage projects .