In Spain, battery storage could face cannibalisation in 10 years

The battery storage market in Spain could face the so-called cannibalisation effect within 10 to 15 years as a result of the expected rapid development of these facilities. Experts agreed on this at a conference organised by the newspaper El Economista in Madrid.

The cannibalisation effect in electricity generation typically occurs when electricity from these sources is generated at the same time, causing electricity sales prices to fall during those hours. It is typically seen with solar and wind power plants, but experts speaking at a recent conference in Madrid say it could also emerge in Spain’s battery storage sector within 10 to 15 years.

“Financial models for battery profitability factor in cannibalisation, but we expect profits to decline only over a period of 10-15 years, when more storage facilities will be in operation,” said Arturo Buenaventura of Magtel, a renewable energy development company.

Citing a recent study by consultancy Afry, Buenaventura added that around 14 to 18 GW of storage facilities could be operating in Spain without the cannibalisation effect.

Rodrigo Alvarez of energy company Statkraft is also aware of the risk of a cannibalisation effect in Spain’s battery storage sector.

“I agree that it is not an issue today, but I think it will be in the future,” Alvarez said, noting that similar developments had been observed with solar power plants.

The foreign news outlet Montel noted that battery storage development in Spain is currently being slowed by the lack of a capacity mechanism for these facilities and lengthy permitting processes. Spain has a capacity mechanism ready, but it has not yet been launched.

“We have been waiting quite a long time for its introduction... Reducing this uncertainty would be significant,” Alvarez added.