Local Flexibility Markets in Spain: Current Developments and Future Prospects
J. Jimeno(1,2), I. Aranzabal(1), E. Fernandez(1), C. Madina(2) and P. Castillo(1) 1. Department of Electrical Engineering, UPV/EHU University of the Basque Country, School of Engineering Bilbao, Spain 2. TECNALIA, Basque Research and Technology Alliance (BRTA). Parque Tecnológico de Bizkaia, Astondo Bidea, Derio, Spain 2026-02-15

Abstract

The increasing penetration of renewable generationin transmission and distribution networks, along with the electrification of end-use sectors, such as transportation and heating, is reshaping the power system. This transition, aligned with the European Union’s climate neutrality goals for 2050, requires new flexibility mechanisms to ensure grid stability.
Local Flexibility Markets (LFMs) have emerged as a solution, enabling demand-side participation and optimizing the use of flexible assets in distribution networks. Several European countries have successfully implemented LFMs, while Spain is in an advanced stage of development. This paper analyzes the current state of LFMs in Spain, identifying key regulatory challenges, ongoing pilot projects, and future prospects.

Key words: Local Flexibility Markets, distributed energy resources, renewable integration, demand-side participation, power system stability.

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