Why Anticipating Electricity Capacity Is Becoming a Strategic Move
There’s a very common scenario when you’re travelling by car and decide not to book a hotel in advance.
You wish to retain the flexibility to choose as you proceed, so you drive along calmly, presuming that when the time comes, you will secure a room without difficulty.
It is not peak season. There are no conferences. There are dozens of hotels.
Consequently, you book late. Or indeed, on the same day.
And when you arrive in the city… everything is full.
If you are the type who plans ahead, this has likely never occurred.
But if you’ve ever improvised a trip, you know the feeling: stress, uncertainty, and the uncomfortable question of what to do now.
A similar phenomenon is beginning to manifest with electricity.
And with energy cost optimisation as well.
Energy is increasingly about access, not merely prices.
For years, the discourse surrounding energy within organisations has centred on one pivotal question:
“At what price point do we procure energy?”
But now another question is beginning to emerge - one that until recently seemed unlikely:
“Will there be sufficient capacity to connect us when required?”
According to data published by Red Eléctrica, only 25% of the transmission grid’s connexion points currently have available capacity for new demand.
In other words: three out of every four “outlets” on the grid are already saturated.
And this does not solely affect new industries.
It affects expansions, new production facilities, data centers, and urban developments.
And, of course, it can also affect your company.
A problem that almost no one sees
The power grid has a peculiarity.
When it starts to get saturated, you don’t notice it.
When it is saturated, you don’t notice it.
There are no visible lines.
There are no red lights.
There is no clear signal indicating that the system is reaching its limit.
And yet, the impact can be substantial.
You surely remember last year’s massive blackout; it arrived without warning and faded from our memory. No one saw it coming.
According to energy analysts themselves, a collapsed grid can delay the establishment of new industries or strategic investments for years.
In other words: the problem does not manifest on the bill.
It becomes apparent when your company seeks to grow.
When energy stops being a purchasing queue item
In many executive committees, energy is still treated as a queue item in the purchasing department.
The price is negotiated, the contract is signed, and the matter is archived as “resolved.”
But when the infrastructure starts to become overloaded, that approach is no longer enough.
Because it is no longer solely a matter of the cost of energy.
It concerns whether access will be feasible when your business requires it.
And at that point, energy ceases to be an operational issue.
It becomes a strategic decision.
When Everyone Wants the Same Room
The problem isn’t a lack of electricity.
In fact, Spain is setting new records for renewable energy generation.
The real problem is this: while more and more energy is being produced, the grid that must transport it isn’t growing at the same pace.
By 2024, around 8% of the renewable energy generated was already being wasted, and by 2025 that figure had doubled.
Meanwhile, new industries wait years to get connected - that plug they need to start operating.
It is akin to a metropolis replete with hotels, yet possessing a scarcity of available accommodations.
The difference between planning and arriving late
When you travel to a city hosting a major event, there are two types of travelers.
Those who secure reservations several months in advance.
And those who arrive presuming that suitable arrangements will materialise spontaneously.
Regrettably, within the energy sector, numerous entities continue to operate in a manner analogous to the latter category of travellers.
Companies that anticipate what they will need in the future - whether new plants, expansions, or process electrification -have more leeway to secure that desired connexion.
Those that wait until the last minute face a problem that doesn’t depend on price.
It is contingent upon the available capacity within the grid infrastructure.
The questions a CEO should start asking
If your company depends on electricity to grow, to run processes, or to expand production, you might want to start asking yourself some questions:
- Is the requisite electrical capacity assured for our projected growth plans?
- Are we forecasting our connexion requirements with adequate lead time?
- Are we considering energy as an operational risk or just as a purchase?
- Do we comprehend the potential impact of a two- or three-year delay in securing a new connexion on our commercial viability?
Because there’s something we need to be clear about: the power grid is not an unlimited resource.
The problem isn’t paying more for electricity
The strategic mistake rarely lies in paying a few cents more per kilowatt.
The real mistake is usually discovering too late that there is no available capacity when your company needs to grow.
At that juncture, the challenge transcends mere pricing.
The predicament is the absence of an available connexion point.
And at that point, there’s no choice but to wait for capacity to become available on the grid.
A process that can span several years.
Planning ahead or relying on luck
By now, I’m sure you don’t want your company to rely on luck.
Organisations that plan their grid access proactively retain the flexibility to make informed decisions.
Conversely, those that fail to do so are solely dependent on the system's availability.
For managing costs is one aspect.
Whilst managing uncertainty presents an entirely distinct challenge.
If you want to analyse your company’s exposure to this problem and what options exist to anticipate it, we can review it together.
Because in energy, getting there first often makes all the difference.
Thank you for your continued readership this week.
We wish you a productive day.
