The European Investment Bank ( EIB ) has signed two green loans with Iberdrola totalling €108 million ( US$124.6 million ) to improve the pumping capacity of the Valdecañas hydroelectric complex in Spain.

The EIB is lending €50 million using its own funds and €58 million with funds from the Regional Resilience Fund.

The complex, which encompasses the Torrejón and the Valdecañas power plants, will help secure energy supply and create storage capacity, enabling the integration and management of renewable energy.

The Valdecañas plant will have a total installed capacity of 225 megawatts, a 15MW hybrid battery, and 7.5 megawatt-hours of stored energy.

Together, the battery and hydroelectric units will make it possible to increase the added pumping capacity to a maximum of 313MW and the storage capacity of the Tajo system to 210 gigawatt-hours.

The works to improve pumping capacity will make use of the existing installations in the Valdecañas and Torrejón-Tajo reservoirs – without changes to the levels of operation – and the existing transport networks, thus reducing the impact on the environment.

Stabilizing electricity grid

Reversible pumping plants make it possible to use and generate electricity quickly, allowing for better management of the consumption and demand curve, and stabilizing the electricity grid.

The upper reservoir acts like a storage system that is charged with the water’s potential energy. Energy can then be stored when excess energy is generated from other non-dispatchable energy sources, and can subsequently be recovered when needed.

It operates like a closed circuit between the upper and lower reservoirs, which does not just consume water, but also reuses it. This system, which is independent of precipitation and water resources, has a long service life and can provide wide-reaching reinforcement to the electricity grid. 

Once up and running, the complex will help to reduce carbon dioxide emissions. The total investment will take place in an EU cohesion region, an area where the per capita income is below the EU average. In this way, the project will contribute to climate action and territorial, economic and social cohesion – two of the eight priorities set out in the group’s strategic roadmap for the years 2024-2027.

Having received funding from the Regional Resilience Fund, the project is also in line with the objectives of Spain's Recovery, Transformation and Resilience Plan. The Regional Resilience Fund directs funding from the NextGenerationEU programme to boost investment in Spain‘s autonomous communities, predominantly for environmental and social projects.

This operation is in line with the EIB’s action plan to support the REPowerEU initiative to improve energy security in the European Union and reduce dependence on fossil fuel imports.