Spain's electrification is at risk due to the grid remuneration system.

What may seem like a technical issue can have very real consequences for everyone: from households looking to install solar panels to businesses that need energy to grow. And the problem is no small feat.

The National Commission of Markets and Competition (CNMC)—the body that regulates the electricity sector—has proposed new rules that, according to analysts and experts, penalize the companies responsible for bringing electricity from the main high-voltage lines to our homes and businesses. Meanwhile, the monopoly that manages the high-voltage highways (Redeia, the former Spanish Electricity Grid) stands to gain, and by a lot. This has generated deep unrest in the sector and a growing fear: if the approach isn't changed, Spain's electrification could stagnate.

Alarm bells have rung after the publication of two key proposals by the CNMC. These proposals affect distribution networks—those that reach consumers—and drastically reduce profitability for the companies that should be responsible for strengthening and expanding them. They will be paid less for investing, and what they are paid will depend on whether they actually acquire new customers. In other words, if a company installs a line for a future industrial estate, it will not receive anything until a company connects, which could take eight years. With this model, many investments will cease to be made.

Meanwhile, Redeia, which manages the transmission networks, has received a completely different and much more favorable model. Starting in 2026, its revenues will increase by 52%, and its investments will be compensated at the audited actual cost. Furthermore, its operating costs will be cut by 6%, compared to the 24% applied to distributors. In short, Redeia receives stability, visibility, and profitability, while the electricity distribution companies will have to assume more risk, greater uncertainty, and less income.

This inequality has direct consequences for consumers. If investment is only made in large transmission networks, but not in distribution networks, many areas will be disconnected or saturated, without the capacity to accommodate new customers, solar panels, electric car charging stations, or industrial projects. The paradox is that we could have more high-voltage power lines crisscrossing the country, but with no way to deliver energy to where it's needed.

The impact is even greater in industrial regions or areas where the grid is already at its limit. If companies cannot connect or face additional costs due to lack of capacity, they may choose to invest in other countries. This not only slows electrification: it can translate into job losses, industrial relocation, and higher energy prices for everyone.

A report by the consulting firm PwC on these proposals warns that the CNMC's new model "ignores the government's energy policy priorities," including promoting electrification and attracting private capital to modernize the grid. It also warns that more than 60 GW of new demand—necessary to decarbonize the country—could remain unconnected. In other words, the country could fail to meet its climate goals not due to a lack of technology or financing, but due to poorly designed regulations.

Another critical point is the financial remuneration rate (TRF), which establishes the "price" paid for investing in networks. Although the CNMC has raised it to 6.46%, experts agree that it is still low compared to other European countries. Italy, for example, offers 8.1%, Sweden 7.3%, and Denmark 7.2%. In a world where investment in networks is key to the energy transition, Spain risks losing its appeal compared to its neighbors.

Electricity companies also complain about the legal uncertainty created by this new model. They don't know how the parameters that determine how much they will be paid will evolve or how they will be applied in each case. Profitability will depend on external factors, such as the number of new customers or market developments, which makes long-term investment planning difficult.

The CNMC maintains that it is introducing technical improvements and efficiency criteria, but if it doesn't adjust the conditions to reflect the real risk of these investments, it could be building a wall instead of a bridge to the energy future. Electrification won't be achieved through rhetoric and ambitious goals alone. A modern, extensive, and well-compensated grid is needed. And if the companies tasked with building it don't see guarantees or returns, they simply won't do it.

Therefore, in simple terms, the problem is clear: if the regulatory course is not corrected, Spain will be left without a grid sufficient to sustain its electrification. And sooner or later, we will all pay for that.