Industry shuts down so the lights stay on

Red Eléctrica halted industry two days in a row with power at 146,67 €

As some participants argue, Spain would have more installed power capacity than at any other point in its history, and even so it had to shut down factories so the country would not go dark. On 12 de diciembre de 2024, Red Eléctrica notified major industry, for the second consecutive day, that its activity was being halted due to a lack of supply in the electricity system. The fourth time that year. The power price closed that day at 146,67 €/MWh, 5,6% above the previous day, according to the Operador del Mercado Ibérico de la Energía.

According to the sources cited, the cause was “high demand and [the] lack of generation during this Thursday.” The mix fell short exactly where it hurt: wind contributed 8% and solar a paltry 7,7%.

What SRAD is and why it was activated

The mechanism that made it possible to cut supply to factories in order not to leave homes in the dark is the Sistema de Respuesta Activa de la Demanda (SRAD), an active demand-response protocol designed precisely to prevent grid collapse. It is activated when high demand and a lack of generation coincide, and it allows large consumers to be cut off while household and small-business supply is maintained.

The statistics show the scale of the problem. In 2023 the protocol was activated twice, both in early September. In 2024 there have already been four, three of them concentrated in the autumn. The official response is that the system “is preparing for these occasional moments of strain” and guarantees supply.

The mix that left the system with no margin

With wind at 8% and solar at 7,7%, the gap was filled by the technologies that are always there: gas-fired combined cycle generated 37% of the electricity consumed and nuclear 18%. Gas plants ran flat out.

Was there really any margin? According to a calculation circulating that afternoon, around 18:30 the system was operating at about 15-16 GW of combined cycle and 9 GW of hydro, when the maximum manageable capacity of combined cycles is 17 GW. With a year of weak rainfall and rising demand, the cushion is shrinking.

Emergency halt or a well-paid stop?

Here the official and the technical accounts diverge. Red Eléctrica describes a situation of strain and lack of supply. Another reading holds that industry stopped because it wanted to: there is an interruptibility service that large consumers can sign up for and that pays for their available capacity, so it is cheaper to order a factory to stop than to start up another plant. According to that thesis, industry gets paid to stop.

Both things can be true at the same time. That the system is under strain and that a market exists that pays for interruption are not contradictory statements. What is hardly in doubt is that the stoppage has a cost—for the factory and for the system as a whole—and that someone is comparing that cost with the cost of keeping the thermal fleet running. No one makes the result of that comparison clear.

Coal, uranium and the nuclear shutdown

The issue quickly drifted toward plant closures. A recurring argument measures reserves: available uranium would last about 11 years for our nuclear fleet, while coal would last for 500. The implicit conclusion is that shutting down thermal and nuclear plants reduces margin on bad days.

On the other side, according to one participant, nuclear generation has not grown worldwide for two decades, small modular reactors do not yet exist—the first is planned for 2030—and Spain is in fact among the countries with the highest nuclear production on the planet. In parallel, the underlying news is the local and political protest against the planned closure of the Almaraz plant, with thousands of people marching from the town hall to the gates of the power station.

More inhabitants, fewer factories and more sockets

There is a fact that, according to one participant, unsettles this whole discussion: Spain has around 10 million more inhabitants than in the 1990s, but electricity consumption would not have grown in that proportion, because industry has been closing in the meantime. Fewer factories, the same households, more cars that want to be electric.

And the grid, in the background. The electricity sector has been asking for months for better conditions to invest in infrastructure: “The lack of structural grid capacity is becoming a bottleneck for electrification and for new opportunities in industry and services,” sources in the sector itself warn.

And what will charge the electric cars?

If the system has trouble meeting current consumption, the question trinc naturally. A skeptical strand holds that the real goal is not to electrify the vehicle fleet but to make private cars more expensive and restrict them, so that only the wealthiest can keep a car. It is a thesis that cannot be verified, but it shapes the suspicion of much of the public.

Another line of analysis points to the opposite: that without more grid and more cheap generation, electrification remains a headline. The December industrial stoppage is the best argument for both sides.

Meanwhile, international comparisons: one participant argued that in Germany the spot electricity market price spiked above 900 €/MWh in a similar episode, although its annual average is around 360 €/MWh. That Spain holds up cheaper does not miccionan it has margin to spare.

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A system that boasts of guaranteeing supply and that, for the fourth time this year, prefers to cut off industry rather than risk a domestic blackout. With prices climbing and renewables making hay… in December, is this a one-off failure on a windless afternoon or the first bill for a model that promises more electrification with less margin?