Spain and Portugal are racing to boost battery storage capacity as firms seek to avoid power disruptions, while Spain navigates tensions between attracting Chinese investment and securing EU-wide industrial regulations.
Battery Storage Booms Amid Reliability Concerns
Spain’s battery storage capacity has grown nearly sevenfold since April, reaching 193 MW, according to grid operator Red Eléctrica. This surge follows last year’s energy crises, including Storm Kristin, which left hundreds of thousands without power in central Portugal for weeks. The industrial sector has been one of the first to look at storage systems, since it can't have its production drop off too abruptly,
said Miguel Matias, founder of Self Energy, a UK-based energy services firm.
The IDAE, Spain’s energy diversification agency, awarded €827m in EU funds to 133 energy storage projects totaling 2,400MW in December. About 80% of this is battery storage. This expansion is critical for industries reliant on uninterrupted operations, with companies demanding advanced systems that switch seamlessly between grid and backup power. We are seeing not only an increase in demand, but also a clear evolution in customer requirements,
said Alberto Bodegas of battery supplier Sungrow.
The urgency stems from vulnerabilities exposed by extreme weather and aging infrastructure. In Portugal, the storm toppled thousands of electricity and telecom poles, highlighting the risks of over-reliance on centralized grids. Spain’s grid operator reported that the new storage capacity will be close to 10 times the amount that Red Eléctrica currently registers on the Spanish grid, signaling a transformative phase for industrial energy resilience.
Spain’s Dual Strategy: Chinese Investment and EU Regulation
We are hugely worried for the future of industrial manufacturing in Europe because we are not competitive with China on any level,
Irujo said.
The push for EU-wide standards reflects a broader tension. While regions like Aragon tout their gateway to Europe
status to attract Chinese firms, national policymakers stress the need for oversight. The Spanish government requires foreign investors in critical sectors to submit detailed business plans, ownership structures, and employment commitments. A new Committee for Strategic Investments, set to launch in autumn, will assess these deals to ensure they align with national economic goals.
Implications for Europe’s Industrial Future
The interplay between energy security and foreign investment could shape Europe’s industrial landscape. Spain’s battery storage expansion aims to stabilize its manufacturing base, but its reliance on Chinese capital raises questions about long-term control. It is evident the auto sector will change. Adapting will allow us to have many more years of production,
said Jorge Azcon, president of Aragon, following CATL and Stellantis’ joint battery plant approval.
However, the lack of uniform EU rules creates risks. Little. This dynamic underscores the urgency of the “Made in Europe” law, which could redefine how foreign firms operate across the bloc.
For now, Spain’s strategy hinges on balancing openness with safeguards. As battery storage scales and Chinese investments grow, the country’s ability to maintain industrial independence while leveraging external capital will test its role as a European linchpin. The coming months will reveal whether its dual approach can secure both energy resilience and economic sovereignty.
