Spain’s Blackout an Energy Transition Wake-up Call for Mexico

On April 28, 2025, over 60 million people across Spain, Portugal, and parts of France experienced one of the most significant power outages in Europe's recent history. Trains stopped, telecommunications went silent, and industrial production halted. But more than an electricity crisis, this event was a wake-up call about how we are managing — or failing to manage — the energy transition.

It is tempting to blame renewables for this event. After all, at the time of the incident, over 70% of Spain's power generation came from solar and wind. But this interpretation is not only misleading, it is dangerously simplistic. The blackout did not stem from renewables but from the lack of resilience in the systems meant to integrate them.

To understand what happened, we must first recognize that renewable energy sources behave differently from traditional fossil-fuel-based plants. They lack physical inertia — the rotational momentum stabilizing power systems — and depend on variable weather conditions. These attributes, while manageable, require smart infrastructure and modernized operational logic. The problem is not clean energy. The problem is attempting to run a 21st-century grid on 20th-century infrastructure.

The sequence of failures was technical but illustrative. A fault, likely a fire near the Pyrenees, disrupted a high-voltage transmission line between Spain and France. This disturbance triggered inter-area oscillations, a known but rare grid phenomenon where regional electricity systems fall out of synchronization. In a matter of seconds, the Iberian grid decoupled from continental Europe. Frequency dropped. Generators disconnected. Load shedding failed. The system collapsed — faster than any human could respond.

Still, the most revealing part of this event lies not in what failed but in what was missing: the absence of grid-forming technologies, lack of fast-response storage, and perhaps a regulatory vacuum around grid-connected battery storage systems (BESS), despite their proven ability to deliver synthetic inertia, frequency control, and flexible capacity.

According to data from Red Eléctrica, Spain's grid operator, errors in solar forecasting amounted to a 3.2GW mismatch — a seemingly small deviation, but in a low-inertia environment, enough to trigger cascading instability. Negative wholesale prices had already pushed many thermal plants offline, reducing the grid's ability to respond with dispatchable assets.

This raises a fundamental issue about how our electricity markets are structured, especially in developing economies. Many times, the financial signals that dominate pricing mechanisms fail to value the critical services — inertia, reserve capacity, and ramping — that support grid reliability. Without a clear framework for compensating those services, we are discouraging the very investments needed to support clean energy at scale.

Across Latin America and other emerging regions, the rush toward decarbonization has outpaced the development of enabling infrastructure and regulatory clarity. Countries with enormous renewable potential, such as Mexico, are still in the process of incentivizing storage, flexible demand, and resilient grid integration. What's missing is not technology, its alignment between policymakers, regulators, investors, and system operators.

To build future-proof energy systems, we must go beyond generation capacity and focus on operational design. That means accelerating investment in grid-forming inverters, fast-response energy storage, and cross-border coordination protocols. It also requires a shift in market logic from short-term pricing to long-term system value.

Mexico's current administration has stated its willingness to invest in renewable energy — CFE's expansion plan published in February proves that. However, if the investment in transmission and distribution infrastructure does not accelerate, the penetration of these kinds of technologies will be limited, and the government's goals will be impossible to reach.

On the other hand, Mexico's new regulatory framework on electricity includes a dedicated chapter on storage systems and their integration into the grid. This is excellent news. In the following weeks, we will have more clarity on the operational dynamics of these systems under the new market rules and their associated economic rewards. 

What happened in the Iberian Peninsula is a strong lesson for Mexico in its energy transition lessons. Let us not waste this moment by assigning blame to the tools critical to our climate goals. Instead, let us do what resilient systems and institutions are designed to do: adapt, evolve, and emerge stronger.