The Spanish government is pushing forward an emergency action plan to speed up deadlines for completing design work and to set clear priorities for measures that could receive ministerial approval as early as this week. Government insiders indicate that a high‑level inter-ministerial meeting will finalize the order of priority, allowing the green light on the plan. Brussels is also watching closely as Spain aims to present the proposed measures next week to address the energy crunch that has stressed the national system.
Since 2020, Spain relied on a backup mechanism in the electrical system known as the cuttability auctions. The government dedicated funds to support industry during periods of peak demand. The mechanism was suspended at the government’s request, with the exception of the islands, where it remains active. The European Union has expressed concerns that this arrangement could conflict with the single market and state aid rules, prompting ongoing dialogue with Brussels.
In response to the ongoing energy crisis, the government has decided to reintroduce a new design for the measure. While the exact details are still being refined, the new mechanism is expected to extend beyond the previous framework and could broaden support beyond large companies, reaching other energy users who were not the primary beneficiaries of the older formula. The Basque government has filed formal claims through the Ministry of Ecological Transition in support of preparing the emergency action plan.
The primary aim of enforcing this policy is to accelerate the deployment of the measure while ensuring regulatory changes remain aligned with overarching policy goals. Any new arrangement will require approval from the Council of Ministers. The mechanism centers on enabling the closure of the second section of the As Pontes coal plant and facilitating the return of cogeneration facilities to active production, as part of a broader effort to stabilize supply and manage demand more effectively.
Red Eléctrica de España, the national grid operator, has indicated that reported power outages are currently negligible in Spain. Nevertheless, the operator advises the owners of energy production facilities, including those with gas turbines and combined cycles, to plan maintenance with an awareness of the current market and operation conditions. This approach helps ensure reliability during a period of heightened demand and structural adjustments within the grid.
Industry support and policy alignment
The wider industrial sector is urging the government to restore a framework similar to the cuttability model and to extend gas measures that encourage pauses in production when necessary. This request comes from the Alliance for the Competitiveness of Spanish Industry, an umbrella group encompassing automotives, refining, paper, chemical and pharmaceutical sectors, as well as food and beverage, cement, mineral resources, and steel. The position is echoed by those who describe energy intensity as a critical issue for the economy and for the stability of essential services.
Large energy‑intensive users acknowledge the current moment as more important than ever. The Association of Large Energy Consumption Companies has called for a robust response and has backed the plan since its initial disappearance two years ago. One industry leader recalled a previous outage on July 24, 2021, when the France–Spain connection with Red Eléctrica de España experienced a fault that caused significant disruption in several regions.
On the regulatory front, the Ministry of Industry, Trade and Tourism has been coordinating with Brussels to set a path for future support. Negotiations include a maximum threshold for compensatory assistance to cover CO2 emission costs, with a provision to increase the ceiling to 244 million euros in the latest round of calls. This cap aligns with the European Commission’s allowances. In 2021, Spain allocated 179 million euros for the same purpose, benefiting roughly 170 companies across the economy. This framework remains a central piece of the country’s plan to cushion industry from volatility while transitioning toward lower‑carbon energy sources.
The government’s approach attaches particular importance to maintaining industrial activity while ensuring the energy system remains resilient. By coordinating with the EU and adjusting subsidies and market mechanisms, Spain aims to protect both households and industry from disruptive price swings and supply interruptions. The ongoing work reflects a broader strategy to balance competitive markets with targeted support during emergencies, without compromising the integrity of the internal energy market.
As the plan moves toward formal approval, industry groups continue to provide input on design specifics and implementation timelines. The collaboration underscores a shared objective: stabilize energy supply, maintain industrial competitiveness, and preserve the integrity of the European energy framework while adapting to evolving demand patterns and infrastructure needs. Stakeholders stress that timely and transparent execution will be essential to mitigate risks and to safeguard economic continuity across sectors that rely heavily on steady energy access.