A few weeks ago, the mayor of a small village showed me the letter setting out the technical and economic connection terms from his distribution company. He had asked for 100 kW to get his first four collective self-consumption installations off the ground: two municipal rooftops and a plot of council land. He was offered 50. Half, with no explanation that would survive a second reading.
"Juan, I've got the project. What I haven't got is the cable."
I've heard that line many times, with other names and in other villages. For years the underlying explanation was reasonable: the grid lacked investment. That has just changed, and almost nobody has told the story.
€10.2 billion more for distribution
Spain's Royal Decree 640/2026, approved this summer, allows distribution companies to invest up to €10.2 billion more between now and 2030, on top of their previous limits. It starts at €1,020 million in 2027 and rises to €3,570 million in 2030. Óscar Mosquera explained it very well as soon as the text came out, and he's worth reading.
The money path
Increase in distribution companies' investment limit over what they already had, in millions of euros. Total 2027-2030: €10,200 million.
Two important caveats. First, it isn't shared out equally. The increase is allocated on the same basis as each company's investment limit, so whoever carries little weight in the sector gets little. Second, the money is earmarked. The decree directs it towards better control, management, observability and cybersecurity of the grid, meeting new demand from industry, housing and electric transport, and strengthening climate resilience.
Even so, the picture has changed. For the first time in a long while, money is not what's missing.
The hard part now is justifying it
To get at that money you have to do your homework: prior consultation, investment plan, approval, works and an annual compliance report. And the decree leaves no slack. A distribution company that fails to submit that report, or submits it in a format other than the one required, is left out of the allocation.
From plan to works
The path Royal Decree 640/2026 sets for every distribution company, every year.
- Prior consultationIt opens a consultation of at least one month on its website to gather needs and proposals, and publishes an analysis of the results.
- Investment planIt submits the plan to the Ministry and the regional governments before 1 May, with a report on what came out of the consultation.
- Approval and publicationOnce approved, the company has one month to publish it.
- DeliveryWorks within its investment limit and its share of the increase.
- Annual compliance reportPublic: capacity granted and refused, capacity granted but not contracted, actual use of the grid. Without it, or in another format, the company is left out of the allocation.
There's more. If a company includes public grants in its plan and then fails to secure them, whether through its own fault or because it never even applied, its investment limit is cut by twice the investment affected. And if for three years in a row it delivers more than 25% below what was approved, it loses 10% of its limit for the following three years.
The regulator has thought about the small ones. Those with fewer than 100,000 supply points are only penalised if they deliver less than half of what was approved. On top of that, anything unused between 2027 and 2030 can be carried over to 2031 and 2032. It helps, but the penalties are still there and every year more indicators are required.
What it should be for
It's worth keeping the goal in sight. We invest in grids to bring generation and storage closer to the people who use the energy: panels on the sports centre roof, batteries on the same industrial estate as the factory that uses them. Fewer losses, fewer lines, less energy travelling hundreds of kilometres only to end up almost where it started.
It's zero-mile energy, and it's the cheapest and most sensible thing we can do. That's where energy communities and collective self-consumption fit in, with solar, wind and storage close to where the energy is used. If this €10.2 billion doesn't serve that too, we'll have wasted an opportunity that won't come round again soon.
And there's a door almost nobody is looking at. The prior consultation every distribution company must open on its website before drawing up its plan exists for exactly this: so that councils, energy communities and businesses can say what they need and where. If you're the mayor with the 50 kW letter, that's where you need to be.
Six years asking for capacity
Since 2020 I've been supporting energy communities and collective self-consumption projects. Throughout that time the fight has almost always been the same one: grid connection capacity. And the outcome depended more on which distribution company you happened to get, and who dealt with you on the other side, than on how good the project was.
I've already written about transmission in the bottleneck of Spain's energy transition, and I won't repeat it here. The question now is closer to home and far less debated: if the money finally reaches distribution, who will actually be able to turn it into works?
Proportional on paper, not in practice
The allocation is proportional, but the capacity to make use of it is not.
Think of a county-level distribution company with 20,000 customers and a small team. Prior consultations, planning, reports and indicators that get tougher every year: for that company they aren't paperwork, they're a department it doesn't have. Without that department, the increase it's entitled to can stay on paper. The big players have legal and compliance teams to make the most of every euro.
And consolidation is already under way, very close to home. In July 2025 Iberdrola completed its purchase of Electra del Maestrazgo, a family-founded distribution company based in Morella that served inland Castellón and southern Teruel: 1,350 kilometres of grid and 21,000 supply points. The deal, around €75 million according to the press (some outlets put it as high as €100 million), was cleared by the CNMC, Spain's competition and markets regulator.
I'm not saying that sale was caused by regulation; it came before the decree. But when the company that can't keep up ends up selling, the buyer already has the scale to absorb this decree and the next one. Unless the rules correct it, consolidation will advance on its own, without anyone having decided it. And when a village's grid is run by someone who doesn't live there, the village loses the person it could talk to about its energy future.
I'm not asking for privileges for anyone. I'm asking that access to this money shouldn't depend on the size of your legal department. If the grid has to move closer to people, and many people live in villages, small distribution companies have to be able to play the game.
What's at stake
A panel on the sports centre or a battery on the industrial estate isn't just electrical works. It's infrastructure serving neighbourhoods, small businesses, industry and that family who, on the 27th of the month, still don't know if they'll make it to payday. That's why I say it whenever I can: we don't install panels, we build social infrastructure.
So next time someone tells you the grid can't take any more because there's no money, don't quite believe them. The money is already there. The hard part is getting it to where it can do the most good, and not only to where there's already structure to spare.
And there's another problem that has little to do with money: much of the time the grid runs well below its capacity. Often it isn't infrastructure that's missing, it's knowing how to manage it. That's what the next link in the series is about.
Frequently asked questions
What is Royal Decree 640/2026?
It is the Spanish regulation governing investment plans for electricity transmission and distribution grids. It was approved on 29 July 2026 and published in the Official State Gazette (BOE) on 31 July. It allows distribution companies to invest up to €10.2 billion more between 2027 and 2030, on top of their previous limits.
How is the €10.2 billion shared between distribution companies?
On the same basis as each company's investment limit, so each one receives in proportion to its weight. Companies that have invested below their limit for two years in a row, and those that fail to submit the annual compliance report or submit it in another format, are left out of the allocation.
Can a council or an energy community influence its distribution company's investment plan?
Yes. Before drawing up its plan, every distribution company must open a prior consultation of at least one month on its website to gather the needs and proposals of interested parties, and then publish an analysis of the results.
Keep reading
Main sources
- Real Decreto 640/2026, de 29 de julio, por el que se regulan los planes de inversión de las redes de transporte y distribución de energía eléctrica — BOE, 31/07/2026.
- El Gobierno aumenta la inversión para redes eléctricas — Energías Renovables, 29/07/2026.
- Iberdrola cierra la compra del negocio eléctrico de Electra del Maestrazgo — Iberdrola, 17/07/2025.
About the author
Juan Sacri is an engineer, cooperativist and co-founder of Sapiens Energía —a non-profit cooperative that has supported more than 90 energy communities across Spain— and of AVACE, the Valencian Association of Energy Communities.