IN Brief:
- Spain has allocated €165 million to seven pumped-hydro projects totalling 2.1GW and 21GWh.
- Portugal plans to increase pumped-storage capacity from 3.6GW to 5GW by 2040.
- The programmes combine long-duration storage with new standalone and co-located battery tenders.
Spain’s Ministry for Ecological Transition and the Demographic Challenge has awarded €165 million to seven pumped-storage hydropower projects providing approximately 2.1GW of power and 21GWh of energy capacity.
Distributed across Andalusia, Asturias, Aragón, Extremadura, Catalonia, and Galicia, the projects form the second round of Spain’s BORALMAC programme. The portfolio includes new pumped-storage installations and modifications to existing hydroelectric infrastructure, allowing established reservoirs, grid connections, and generating assets to provide additional flexibility.
Although the original budget for the round was €90 million, the allocation increased to €165 million following project assessment. Funding is linked to Spain’s Recovery, Transformation, and Resilience Plan and the European Union’s NextGenerationEU programme, which have supported a wider package of storage, renewable generation, and network modernisation.
An earlier BORALMAC round allocated €100 million to four developments expected to add around 2GW. The latest awards therefore extend an established programme in which pumped storage is being developed alongside batteries, demand flexibility, transmission reinforcement, and renewable projects with increasingly complex grid-support requirements.
Portugal is pursuing a parallel strategy, with current pumped-storage capacity of approximately 3.6GW expected to rise to 3.9GW by 2030 and 5GW by 2040. Its National Energy Storage Strategy also proposes a 750MW tender for standalone batteries and a further 300MW procurement for renewable developments incorporating storage.
By combining hydroelectric and electrochemical technologies, both countries are seeking flexibility across several operating timescales. Batteries can move rapidly between charging and discharging, while pumped-storage plants can sustain output through longer periods and contribute through large rotating electrical machines.
Duration returns to system planning
Across the seven Spanish projects, the awarded portfolio averages roughly ten hours of energy storage, although individual designs will vary. That duration can cover extended evening peaks, wind-generation shortfalls, solar ramp-down periods, and restoration requirements that cannot be met solely through brief injections of active power.
Hydroelectric motor-generators can also contribute inertia, reactive power, voltage control, short-circuit strength, and frequency support, depending on their electrical configuration and operating mode. Those services are gaining value as conventional synchronous generation operates less frequently and a larger proportion of power enters the system through converter-connected resources.
Batteries remain more suitable for many rapid and highly cycled services because they can be installed in modular phases, located close to specific constraints, and commissioned more quickly than major civil-engineering projects. Their operating flexibility supports frequency response, balancing, congestion management, renewable smoothing, and local network services.
A diversified storage fleet avoids assigning every requirement to one technology. Pumped hydro can shift bulk energy and provide synchronous support, while batteries can manage rapid variations and geographically targeted network constraints. Actual operating value will depend on access to balancing, capacity, ancillary-service, wholesale, and congestion-management markets.
Development risk remains substantial for pumped storage, whose construction requires detailed geological, hydrological, environmental, and civil-engineering work. Underground caverns, waterways, shafts, reservoirs, turbines, generators, transformers, and high-voltage connections all contribute to capital cost and programme exposure, while planning and environmental assessments can continue for several years.
Following the widespread Iberian electricity interruption in spring 2025, system resilience has received closer scrutiny across Spain and Portugal. Storage cannot replace secure protection systems, transmission capacity, reserve procurement, operational coordination, or restoration planning, although it can expand the range and duration of resources available during major imbalances.
Portugal’s planned tenders add a market-design challenge, since revenue arrangements must recognise the different services supplied by short- and long-duration assets. Where several procurements direct projects toward the same balancing or wholesale revenues, competition can increase more rapidly than system demand, weakening commercial stability despite continued technical need.
Europe’s expanding interest in storage beyond short-cycle batteries has already brought pumped hydro, compressed air, flow batteries, thermal storage, and other long-duration technologies back into policy discussions. Installed megawatts alone provide little indication of whether a system can withstand a four-hour evening peak or several days of weak renewable output.
Network access will determine how much of the planned capacity becomes operationally useful. A storage plant behind a constrained connection may reduce curtailment by charging during high renewable output, but dispatch arrangements must also determine when the network can accept that additional demand and when stored electricity can be exported without creating a new constraint.
Large rotating machines and inverter-based storage will also require coordinated modelling. Protection settings, fault contribution, reactive capability, dynamic response, harmonics, communications, and restoration functions must be assessed across the connected system rather than evaluated solely at each project boundary.
With funding allocated and capacity targets established, the programmes now move into permitting, detailed design, procurement, construction, and grid integration. Their contribution will ultimately be measured through dependable operating flexibility, rather than the volume announced during the award process.
