The Official State Gazette published on September 17 the Order TED/966/2026 , which formally creates the peninsular capacity market and establishes how generation, storage and demand can compete for remuneration associated with the availability of firm power.
The change is especially relevant for storage, as new investments in generation and BESS will be able to access service periods defined according to the useful life of each technology, with a maximum of 15 years .
Existing facilities will compete for twelve-month contracts, while demand will be able to choose periods of between one and ten years.
However, the publication of the Order resolves the legal framework, but it still does not allow calculating how much a specific battery can earn.
The market will remunerate firm MW, not installed MW . Each technology will have a firmness coefficient between zero and one, which will multiply the installed capacity to determine the recognized capacity for the purposes of the mechanism. In hybrid installations, the calculation will be performed module by module.
Therefore, a 100 MW BESS (Basic Energy Storage System) will not necessarily be able to offer 100 MW of firm capacity. The applicable storage coefficient has not yet been determined and will be announced along with other parameters in each tender.
Up to 15 years of revenue, but key figures are still missing
The Order structures the market around three auction modalities.
The main auction will contract the system's structural stability requirements. Generally, up to five years may elapse between the award and the start of service provision, allowing new projects time to be built before assuming their obligations.
In addition, the call for proposals may exceptionally reserve a quota for certain new investments with a horizon of up to nine years from the award date until the start of service. Promoters may bring forward this date if their projects are completed earlier.
For new generation and storage facilities, the service period should be approximately half the useful life of the reference technology, with a maximum limit of fifteen years.
The initial reaction from the sector combines relief at finally having a regulatory framework with caution regarding the still-unresolved variables. Eloy J. Márquez, country head of MARS Renewable Iberia , focused precisely on this point: the possibility that the new BESS projects can offer long-term financing provides greater certainty, but it remains to be seen how much economic value each project will be able to capture.
“ The BESS coefficient is not yet fixed ,” warned Márquez, who summarized the equation of the new income as installed power multiplied by the firmness coefficient and by the awarded price in €/MW firm/year.
He also pointed out another of the unknowns left by the publication of the Order: " we still have no date" for the first auction.
The resolution that calls for each process must specify the required power curve, the firmness coefficients, the flexibility threshold, the service periods by technology, the unit investment values and, among other elements, the applicable economic limits.
That design also raises another question for BESS: how much will it cost to be available ?
Remuneration will not depend solely on the price obtained in the auction. A winning battery must maintain sufficient capacity to respond during periods of system stress, which may affect its state of charge and its simultaneous participation in arbitrage or balancing markets.
Therefore, the economic value of the mechanism should be measured against the potential opportunity cost of reserving power to meet the capacity obligation.
Meanwhile, various voices in the market continue to place the first auctions during the first half of 2027 , with some expectations even pointing to the first quarter.
However, there is no official date published and both the temporary and main auctions must be called beforehand.
Pay-as-bid, aggregate demand and new thermal plants outside the scheme
The product to be traded will be firm power expressed in MW and the economic offers will be formulated in €/MW firm per year .
The award will be made by sealed envelope under a pay-as-bid scheme, so each selected participant will receive the price included in their own bid.
The call for tenders may include a maximum price for the firm power curve and, for existing generation and storage facilities, a lower reserve price . The latter aims to limit potential excessive rents, although certain facilities undertaking new investments may request exemption. Specific treatment is also established for hybrid systems when the new investment exceeds a predetermined threshold.
The design also introduces a clear cut for the new fossil capacity.
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When it comes to new investments participating in the main auctions, only renewables, storage or demand will be allowed.
Existing thermal power plants will be able to participate, but they must adhere to a maximum of 550 grams of CO₂ from fossil fuels per kWh of electricity and comply with the flexibility threshold determined for each technology. This indicator will be calculated based on their historical performance in manual activation balancing markets.
The call for tenders may also include an overall limit on CO₂ equivalent emissions for all successful bidders. If this threshold is exceeded, bids for higher-priced emitting technologies may be rejected until the established level is restored.
The mechanism is not restricted to large plants either.
Producers, storage owners, end consumers, demand aggregators, and generation and storage aggregators will be able to participate.
Individual installations must have a firm capacity of at least 1 MW , while smaller resources may be grouped together. In these cases, each module must have less than 1 MW of firm capacity, and the combined capacity must exceed the minimum requirement.
The addition of production and storage aggregators thus broadens the scope compared to schemes focused solely on demand response and opens the door for smaller distributed assets to access the capacity market.
Three auctions and penalties if capacity does not respond
Along with the main auction, the design incorporates an adjustment auction intended to correct coverage deviations or cover capacity that has not yet materialized.
It will have a twelve-month service period that must begin within a maximum of one year from the award date, and only facilities that are already in service before the call for applications may participate.
Until the provision corresponding to the first main auction begins, there will also be annual transitional auctions . These may even be held simultaneously for different fiscal years in order to cover the interim period.
But the compensation will be offset by an effective obligation of availability.
Red Eléctrica will be able to carry out tests at least once a year to verify that the committed power can respond when the system needs it.
The first breach may result in a penalty equivalent to one month's salary increased by 20%; the second, a quarterly payment plus that surcharge; and a third breach may result in the loss of the annual remuneration, also increased by 20%, in addition to disqualification from providing the service and the execution of the corresponding guarantees .
Márquez also emphasized this point by warning that the new income “will not be free”: the committed availability must be proven and failures will have economic consequences.
A secondary market is also enabled that will allow the transfer or assignment of awarded rights and obligations between authorized facilities, always with the consent of the system operator and without reducing the firm power committed.
The cost of the mechanism will fall on marketers and direct consumers through differentiated unit prices by tariff segments and time periods.
The methodology will take into account the system's coverage level hour by hour. When the ratio between available firm power and demand is lower, that period will bear a greater share of the cost, also sending an economic signal to shift consumption to times of greater availability.
The Order comes after several years of processing and in an electricity system that has changed rapidly. Wind power already exceeds 33 GW , while photovoltaic capacity has grown from around 9 GW at the beginning of 2019 to more than 41 GW in 2025. In 2024, renewables reached 56.8% of national generation.
This development explains part of the problem the new market aims to solve. The text itself acknowledges that the energy-only market, despite increased volatility and arbitrage opportunities, still does not generate sufficient signals to mobilize all the necessary investment in firm and flexible technologies. The Order explicitly uses the concept of “missing money” to describe this gap.
Interconnections with Europe are also part of the strategy to reduce hedging risks, but the Government admits that they need longer horizons and do not offer a sufficient solution for the short and medium term.
With the publication of TED/966/2026, Spain now has the general rules for its capacity market. The next step is to determine its real economic impact.
For BESSs, the question is no longer simply whether they will be able to charge for being available. The unknown becomes how many MW of each project will be recognized as firm, what remuneration they will receive for them, and how much value they will have to put on the table in other markets to guarantee that availability .
The next calls for applications will put numbers to that equation.