Portugal and Spain step up pumped storage expansion plans
Portugal and Spain are accelerating investment in pumped storage as rising renewable generation increases the need for large-scale, long-duration energy storage across the Iberian electricity system. Portugal has unveiled a National Energy Storage Strategy targeting approximately 3.9 GW of pumped storage capacity by 2030 and more than 5 GW by 2040, while Spain has awarded €165 million to seven pumped storage projects with a combined storage capacity of 21.091 GWh.
The two initiatives take different approaches to expanding storage capacity. Portugal’s strategy sets national capacity targets and outlines future auctions, tenders and regulatory reforms, while Spain is providing direct funding to projects that will add 2.071 GW of generation capacity.
Portugal targets
Portugal’s National Energy Storage Strategy identifies pumped storage as the country’s primary solution for large-scale, long-duration electricity storage. The strategy was presented by Secretary of State for Energy Jean Barroca in the presence of Minister for Environment and Energy Maria da Graça Carvalho.
The plan comes as renewable energy already accounts for around 80% of Portugal’s electricity generation. Increasing storage capacity is intended to provide greater flexibility as additional renewable projects are connected to the electricity system, allowing surplus generation to be stored and supplied back to the grid when required.
Portugal currently has more than 3.6 GW of operational pumped storage capacity. Under the new strategy, this is expected to increase to approximately 3.9 GW by 2030 before exceeding 5 GW by 2040.
Future capacity additions are expected to include projects such as Alto Lindoso and the proposed Minhéu pumped storage scheme. Portugal is also home to the Tâmega hydroelectric complex, one of Europe’s largest pumped storage developments.
The government plans to support the expansion through competitive auctions for new energy storage capacity and future tenders specifically for pumped storage projects. Regulatory reforms are also planned to simplify permitting procedures and facilitate project development.
According to the strategy, additional storage capacity will help improve security of supply, reduce curtailment of renewable generation and provide greater stability to electricity prices. The government also sees storage as a means of strengthening Portugal’s energy sovereignty as its electricity system becomes increasingly dependent on renewable generation.
Spain awards €165 million
Separately, Spain’s Ministry for the Ecological Transition and the Demographic Challenge (MITECO), through the Institute for Energy Diversification and Saving (IDAE), has awarded €165 million to seven innovative pumped storage projects under the second call of the BORALMAC program.
The selected projects will collectively add 2.071 GW of installed generation capacity and 21.091 GWh of storage capacity. The developments are spread across Andalusia, Asturias, Aragon, Extremadura, Catalonia and Galicia.
The second funding round was initially allocated €90 million. However, the Spanish government increased the available budget by €75 million following strong demand, taking the total funding awarded to €165 million.
Six of the seven selected projects involve the construction of new reversible hydropower plants. The remaining project, located in Extremadura, will use existing hydropower infrastructure to increase energy storage capacity through pumped hydro.
The latest allocation follows the first BORALMAC call, under which €100 million was awarded to four projects with a combined storage capacity of slightly more than 2 GWh.
Selection criteria
IDAE assessed the projects on their economic viability, technical readiness and contribution to Spain’s energy transition. The evaluation considered their ability to integrate variable renewable generation and strengthen grid resilience, as well as their potential contribution to European and domestic supply chains and technological innovation.
Projects were also assessed on their contribution to regions facing demographic challenges or undergoing just transition processes, linking the storage programme with wider regional and industrial development objectives.
To support projects during development, IDAE said advance payments may be provided against the awarded funding, subject to guarantees.
Together, the measures in Portugal and Spain point to a broader expansion of pumped storage across the Iberian Peninsula, with both countries using existing hydropower capabilities and new reversible projects to provide the flexibility required for electricity systems with growing shares of variable renewable generation.
The featured photograph is for representation only.
