Electricity sector outlook for 2026: a crucial year for demand electrification and the energy transition
The year 2026 is set to be a decisive period for the Spanish electricity sector. Following a 2025 marked by significant events, such as the blackout of 28 April and regulatory advances in investment, the focus is now on consolidating a framework that allows us to respond to the challenges of demand electrification, ensure the security and resilience of the system, and accelerate the energy transition in line with European objectives.
By Marina Serrano
One of the fundamental pillars for driving electrification is ensuring that demand can access the electricity grid in a streamlined and efficient manner. Currently, access and connection requests to the distribution network in 2024 stand at 67 GW, while infrastructure saturation has reached levels close to 86.2%. This scenario highlights the urgent need to increase the grid's operating capacity and simplify administrative procedures so that new industrial, electric transport or storage projects can be deployed without delay.
How can we boost the electrification of industry?
In 2026, it will be essential to advance the implementation of regulations that facilitate the connection of demand, particularly for industry, ensuring that processes are clear, predictable, and responsive. The approval of specific regulations to expedite the connection of large consumers and electrification projects will be a key factor in maintaining Spain's competitiveness within the European context and ensuring compliance with decarbonisation targets.
Demand electrification is not just a technical issue, but also a strategic one. Increasing electricity penetration in sectors such as industry, mobility, and storage is essential for reducing greenhouse gas emissions and increasing energy efficiency. To this end, approving regulations that incentivise electrification will be key in 2026, establishing clear regulatory frameworks that provide security to investors and allow projects to be planned sustainably.
The electricity sector must also work in close collaboration with industry to identify opportunities for efficiency and flexibility, promoting the integration of technologies such as energy storage, renewable hydrogen, and the electrification of high-consumption industrial processes. These measures will not only contribute to the energy transition but will also strengthen the competitiveness of the Spanish economy relative to the rest of Europe.
How does taxation affect investments and business strategies?
An appropriate fiscal framework will be key for 2026. Specific tax incentives for investment in networks, storage, flexibility, and industrial electrification can accelerate the sector's development. Similarly, measures that favour energy efficiency and the transition towards renewable sources provide clear signals to investors and consumers, encouraging decisions that align with climate and competitiveness objectives.
Taxation impacts not only investment but also strategic decision-making by electricity and industrial companies. Therefore, it is fundamental that progress is made in 2026 on a framework that integrates tax benefits linked to electrification and modernisation projects, reinforcing the sector's capacity to respond to the growing demand for clean and reliable energy. Furthermore, the review of taxation should be aimed at eliminating those tax burdens that weaken the drive for electrification and reduce the competitiveness of the energy carrier that will power the country's electrification and the competitiveness of our industry.
Lessons learned from the blackout
The blackout of 28 April 2025 was a clear reminder of the challenges facing a highly decarbonised electricity system with high renewable energy penetration. One of the main lessons from this event is the need to reinforce voltage control mechanisms and adapt system operation to effectively manage the volatility associated with renewable generation. In 2026, priority must be given to advancing regulations and procedures that allow for robust, stable, and flexible voltage control. This includes both the updating of technical and operational codes and the implementation of real-time monitoring tools, which allow problems to be anticipated and ensure the quality and continuity of the electricity supply. System resilience will be key to sustaining consumer confidence and allowing demand electrification to be carried out safely and sustainably.
What does the start of a new regulatory period in 2026 imply?
A central element for 2026 will be the start of the new regulatory period, which must incorporate a remuneration model that offers certainty and stability to investors in distribution networks. This model will allow investments to be planned and executed efficiently, adapting remuneration to the needs of the investment cycle and ensuring that electrification and digitalisation objectives can be achieved on time and on target.
In addition, the new regulatory framework must reflect the priorities of the European Union, incorporating sustainability, efficiency, and flexibility criteria that facilitate the energy transition. A solid and well-designed remuneration model will not only incentivise investment in infrastructure but will also allow progress in the electrification of industrial demand, improving the competitiveness of the Spanish electricity system in the European context.
Flexibility and digitalisation of the electricity system
System flexibility will be a critical component in 2026. The integration of renewables and the increase in demand electrification require mechanisms that allow supply and demand to be adapted dynamically. To achieve this, it will be necessary to promote technological solutions such as distributed storage, smart demand management, and interconnection with neighbouring networks.
The digitalisation of electricity grids is another key factor in achieving a more resilient system. The implementation of sensors, real-time analysis platforms, and prediction tools will allow grid operation to be optimised, losses reduced, incidents anticipated, and supply quality guaranteed. The combination of flexibility and digitalisation will allow a complex system to be managed efficiently, facilitating the integration of new loads and renewable generation.
Why do investment limits need to be increased?
To ensure that demand electrification can proceed without restrictions, 2026 must be a year in which investment limits are increased and the development of anticipatory investments is approved. These investments allow the grid to be prepared for new consumption before it develops, avoiding bottlenecks and ensuring that the infrastructure is ready to absorb growing demand.
Likewise, strategic investment planning must align with grid modernisation, digitalisation, and the implementation of flexibility solutions, ensuring that every euro invested contributes effectively to the energy transition and system resilience.
2026: key to leading demand electrification
Overall, 2026 is shaping up to be a year defined by intense and significant regulatory activity for the Spanish electricity sector. The combination of initiatives to improve access and connection, boost demand electrification, reinforce voltage control, launch the new regulatory period with a solid remuneration model, advance flexibility and digitalisation, approve strategic and anticipatory investments, and establish an incentivising fiscal framework, will set the course for the electricity system in the coming years.
If executed in a coordinated manner, 2026 will allow us not only to advance decarbonisation and energy transition objectives but also to strengthen Spain's industrial competitiveness, ensure a secure and resilient electricity supply, and consolidate the country's position in Europe as a benchmark in electrification and energy efficiency.
The Spanish electricity sector faces a scenario of great opportunities and challenges in 2026. Demand electrification, grid modernisation, flexibility, digitalisation, strategic investment, and an appropriate fiscal framework will be the pillars upon which a more robust, efficient, and sustainable system will be built. The decisions and measures adopted this year will be decisive in ensuring that Spain can meet its energy transition targets, maintain industrial competitiveness, and offer a reliable and resilient electricity supply for all consumers.
2026 will not be just another year: it will be a turning point that defines Spain's capacity to lead demand electrification, maximise the benefits of strategic taxation, and consolidate an electricity system prepared for the challenges of the future.
Marina Serrano
Marina Serrano President of aelēc (Association of Electric Energy Companies) www.aelec.es