During the energy crisis, Spain launched a new framework to curb emergency power use when there are significant gaps between production and demand, with the goal of keeping the national grid stable at all times. This mechanism replaces the old interruptible service and has been in place for more than a decade, enabling the mandatory shutdown of industrial plants to reduce electricity consumption when needed.
Electrical Network operators recently conducted an auction to identify large factories or energy companies willing to pause operations during an electricity emergency in 2024. They bid the amount of energy they would voluntarily stop using for short periods and the price at which they would halt activity, in exchange for payments.
The tender, dubbed the active demand response service, will pay almost twenty large consumers a fixed fee of about 143 million euros next year, with additional payments triggered by the duration of outages and prevailing electricity prices. The current arrangement includes extra payments depending on how long facilities are off and the market price at the time.
Bidders committed to a total of 609 megawatts of power and ready to stand down for 5,745 hours throughout the year, averaging 40.82 euros per megawatt-hour for the stop function. Compared with last year’s results, the average price fell from 69.97 euros per MWh, while the available power and hours rose—from 409 MW and 2,714 hours respectively to the new totals.
One year, one outcome: 94 million earned
The total compensation paid to these participants amounts to 94.3 million euros for the year. The system was activated only once during the year, on the night of September 4, when the national grid operator directed several industrial plants to reduce consumption to prevent a serious imbalance caused by insufficient generation relative to demand and to safeguard system reserves.
On that night, Red Eléctrica de España ordered factories to halt consumption at 21:59 to avert issues stemming from the unplanned shutdown of the Ascó nuclear plant in Tarragona due to an internal fault, a situation compounded by a downturn in wind production and higher exports. Official records confirm that all available capacity—497 MW—was ordered offline, reducing consumption by 1,424.7 MWh. Affected plants received an extra 189,756 euros for the unutilized energy that night, in addition to the fixed annual charge.
The shutdown was a precautionary measure rooted in a broader policy shift. Although the emergency system was invoked, there was no risk of a nationwide blackout. Authorities stressed that supply continuity was never compromised; the activation served to guarantee reserve levels defined in operating procedures in response to reduced system resources.
Historical context and ongoing purpose
The active demand response framework is designed to be deployed during times when electricity shortages threaten supply reliability for market-regulation services such as replacement or tertiary reserves. Factory closures under this program can last up to three hours daily per participant, with at least 15 minutes’ notice.
The current system, which has operated since 2008, aims to prevent imbalances across Spain by aligning the grid’s operating needs with the country’s consumption patterns and price signals. Fifteen companies currently participate, and the legacy program paid far more to a larger set of factories in earlier years.
The first year of the modern scheme cost just over 94 million euros and saw a single activation. Over the long arc of the program, the obligation to pay for interruptible capacity has been substantial. In 2019, the annual cost was around 200 million euros, with higher figures in earlier years. Even during 2014, the program approached 660 million euros in charge to consumers.
From 2008 through 2017, Red Eléctrica employed a fairly conservative approach, rarely triggering the blackout framework and primarily using it for short forced shutdowns of around five hours per event, with many periods of non-use. A later legal reform, pursued by the government, broadened the circumstances under which the system could be activated for economic reasons to blunt sharp market swings caused by supply-demand gaps. In 2018 the mechanism activated 50 times, and in 2019 it did so only three times. This ebb and flow reflects the tension between maintaining reliability and avoiding needless interruptions in industrial activity.
Notes for readers
The active demand response system is part of a broader energy-security plan. It works within the grid’s regulatory framework to respond quickly to imbalances, sometimes involving local supply constraints or price spikes that threaten stable operation.
Marking a shift in policy, the system demonstrates how market participants can contribute to reliability while markets adapt to ongoing volatility in generation, including intermittents from wind and other renewables. The overarching goal remains clear: keep the lights on without unnecessary disruption to industry, even as conditions swing between generation dips and demand surges. (Authorities and grid operators document these events to maintain transparency and guide future adjustments.)