Spain's technical curtailment crunch: trends, drivers and technology revenue impacts

The Iberian Peninsular blackout in April 2025 has reshaped grid operations in Spain – less renewables, more gas. This reduction of renewable generation has manifested as a sharp increase in technical curtailment. In Spain, a portion of this curtailment is not compensated – meaning generators are exposed to revenue risk even after successfully clearing in the day-ahead market. In July, nearly 8% of total renewable output was curtailed without compensation. What’s more, wholesale day-ahead costs have typically dominated end-user prices, but this is changing: balancing markets (where gas is constrained-on at the expense of renewables) are emerging as a material share of costs as renewable integration accelerates. Monthly technical curtailment costs in Spain surged by an average of 95% year-on-year between May and September. This report explores the winners and losers of this change in grid operation, alongside key risks and opportunities.