Spain Softens Renewable Energy Requirements for Data Centers in Exchange for Accepting Grid Disconnections

The Spanish government has revised its draft royal decree regulating data centers, softening some of the most contested provisions around hourly renewable energy consumption while introducing a new obligation for operators to accept automatic grid disconnections. The revised text, sent to the Council of State on Monday, follows the analysis of more than 600 submissions and a mandatory report from the National Commission on Markets and Competition (CNMC), which had called for greater flexibility in the renewable energy requirements.

Under the new draft, data centers with more than 10 megawatts (MW) of electrical capacity — up from a threshold of just 1 MW in the original proposal — will still be required to consume mostly clean energy until the country's power mix reaches 90% renewable, either through self-generation or long-term power purchase agreements (PPAs). However, operators will now have greater flexibility in meeting these obligations. Data centers can justify 80% renewable consumption on an hourly basis from the outset, as required by the August consultation proposal, but may also opt for a transitional period of up to five years from the regulation's entry into force, during which somewhat looser requirements will apply. Until December 31, 2028, operators need only demonstrate a 60% renewable share during peak hours at their voltage level. After that deadline and until the end of the transitional period, the threshold rises to 70% during both peak and flat hours.

In exchange for this dispensation, data centers that opt for the transitional regime will be obliged to participate in the Automatic Power Reduction System (SRAP), a voluntary mechanism managed by Spanish grid operator Red Eléctrica de España (REE) to automatically disconnect or reduce the output of renewable generation, pumped storage, or battery installations when grid congestion or real-time failures are detected. Data centers covered by the transitional provision may be automatically disconnected by the system operator when necessary, without receiving compensation, and will be the first category of installations to be curtailed. The government argues that if adding new demand carries a cost, it should be borne by the new entrant rather than by other consumers. Operators will need to assess whether their backup systems or batteries are sufficient or whether they must oversize their installations. The executive contends that the possibility of supply cuts may not be as critical depending on the type of center and the services it provides.

The government has closely monitored warnings from Ireland, which is taking urgent measures against the risk of blackouts caused by data centers that account for a disproportionate share of its electricity consumption. The new draft notes that this new demand "competes, moreover, for already limited grid capacity with industrial projects linked to decarbonization and the creation of new industrial capacities." Another change allows data centers to contract electricity from installations older than under the original text — those operational from 36 months before the data center's commissioning, double the timeframe in the original proposal. For solar photovoltaic installations, that limit is eliminated entirely, in a measure aimed at mitigating so-called curtailment, the renewable energy currently wasted during peak sunlight hours because there is insufficient demand. Renewable supply contracts must now have a minimum duration of six years, down from ten years in the original proposal, and supply with storage is clarified as counting toward the renewable computation if the electricity is of clean origin.

The government aims to approve the decree before the November 29 elections. If the Council of State's opinion is not ready in time, it does not rule out doing so after the vote and while in a caretaker capacity, in which case a report from the State Attorney's Office would be required to justify the measure as necessary for the general interest. The new draft also significantly hardens and graduates the surcharges for failing to comply with the hourly renewable correlation, introducing five tiers instead of the previous three and notably raising penalties on network tolls and charges — the regulated portion of the electricity bill — for significant non-compliance. A specific regime is also envisaged for data centers that form part of EU initiatives whose primary purpose is to strengthen European digital sovereignty, such as artificial intelligence factories and gigafactories and supercomputers, including projects submitted by the Spanish government to its calls for proposals. These centers are not exempt from efficiency and renewable energy requirements but are subject to phased special provisions for a limited period, after which the general regime applies. To qualify, they must certify that active infrastructure — servers and computing equipment — is under European control, in accordance with the criteria of the relevant call for proposals, while technical operation may be entrusted to a third party as long as management remains with the European entity.

In response to water stress in Spain, data centers will have to comply with European labeling levels for water usage effectiveness (WUE). The Ministry for Ecological Transition and the Demographic Challenge will establish a methodology requiring the most efficient technology depending on the country's various climate zones to guarantee minimum water consumption in all cases, with a six-month adaptation period from commissioning. The Power Usage Effectiveness (PUE) indicator has been slightly relaxed from 1.15 to 1.25. The government emphasizes that the new proposal maintains the overall ambition of the first text while incorporating technical improvements after tens of thousands of pages of submissions, and notes that while other countries are preparing regulations to ensure orderly and sustainable data center development, the Spanish proposal is the most ambitious and guarantee-driven to date. Executive sources reject claims that imposing tougher conditions on data centers than on other installations is discriminatory, arguing that this is a demand unlike any other. They note that renewable hydrogen, for example, is highly price-sensitive and would normally never consume during peak hours because it competes with gray hydrogen. No other type of demand has requested as much grid access as data centers, with 12 gigawatts (GW) already granted, of which the sector itself considers only 2 to 4 GW viable, with the remainder being duplicate or speculative requests. On digital sovereignty, the new draft introduces modifications with requirements for hosting certain information systems linked to public administration, tying that protection level to the "high" category of the national security scheme, and exempting metadata and telemetry data from digital sovereignty obligations. One issue not included — requested by environmental groups — was a ban on locating data centers near residential areas, partly over concerns about encroaching on regional competences.