For the first time, Spain rolled out a new system intended to trim emissions and curb light consumption urgently, a year after its commissioning. It occurred on a September night, roughly a month ago. The Spanish electricity network administrator ordered the temporary shutdown of several industrial facilities to reduce national electricity use and prevent a serious imbalance caused by insufficient generation to meet demand with guaranteed supply.
Red Eléctrica (REE) issued an order for factories to halt electricity use at 21:59 on Monday to avert an issue stemming from an unplanned closure of the Ascó nuclear plant. The outage was triggered by an internal fault, coinciding with a wind power shortfall in Tarragona, and there was higher-than-expected electricity export activity, as confirmed by multiple official sources.
Fears of non-compliance led many factories to suspend operations. The new active demand response system, approved by the government a year earlier under the Energy Security Plan, was deployed to rapidly reduce high electricity consumption—especially in large industry—to prevent serious deviations in energy use and keep the system running smoothly.
Red Eléctrica noted that even with the emergency activation, there was no risk of a blackout that night. The aim was to guarantee reserve levels set out in operating procedures in response to a temporary reduction in available system resources, according to sources from the electricity system administrator.
94 million per year plus extras
In October of the prior year, REE conducted an auction to recruit large energy users, marketers, and electricity market participants willing to curtail consumption for a fee if needed. As a result, the peninsula-wide system secured 497 MW of ready capacity to reduce demand at specific times to maintain balance between production and consumption. Official REE records show that on the night of September 4, the full 497 MW was commanded offline, cutting 1,424.7 MWh of consumption.
Companies awarded the active demand response tender will receive a fixed fee of 69.97 euros for each assigned MW per hour, with the expectation that they can stand down and provide emergency service for a total of 2,714 hours per year. This arrangement covers 31% of all hours across the year, including workdays and multiple daily periods.
The annual total payment to participating companies stands at 94.3 million euros on a fixed basis, with additional payments proportional to the duration of outages and current electricity market prices. Following the forced shutdown a month earlier, affected factories received an extra 189,756 euros, calculated at 133.19 euros for each of the 1,424.7 MWh not consumed that night.
Officials from the Ministry of Ecological Transition described the active demand response service as a normal evolution of flexibility and demand management tools, noting that new market players around these services will become more important in a more digital and smart electricity system. The current auction expires on October 31, and REE is expected to run another bidding round in the coming weeks to source contractors for the next year.
Replace old ‘intermittency’
The active demand response system is designed to be deployed at specific times to maintain supply during energy shortages for certain market-regulation services, such as replacement reserve or tertiary regulation. Factory closures under this program can last up to three hours per day for each beneficiary, with a minimum notice of 15 minutes.
The new system replaces the older schedule that had operated since 2008 and aimed to avoid imbalances by integrating the system’s own adjustment services with local security measures. Only fifteen companies participate in the ongoing service, whereas the previous framework paid more than a hundred large factories.
The first year of the new arrangement cost just over 94 million euros and involved a single uninterrupted activation. The program’s overall electricity bill outlays reached several hundred million euros over the years of operation, with amounts varying across years of reform.
From 2008 to 2017, Red Eléctrica hardly used the blackout mechanism, directing mandatory shutdowns for roughly five hours at a time while factories were required to participate in test shutdowns. In the latest years, a government reform pushed by the administration of Mariano Rajoy broadened the grounds for activation to avert sharp price spikes and imbalances. In 2018, activations occurred 50 times; in 2019, they occurred only three times.