The Energy Island: Opportunities and Limits of Iberian Interconnection

Cora Jackson

A view of Granada, Spain as it is plunged into darkness during a nationwide power outage on April 28, 2025 (Via: CNN.com)

The power outage across the Iberian Peninsula this past April marked Europe’s largest blackout in two decades. The disaster lasted up to 18 hours for some localities, leaving millions of people across Spain and Portugal without electricity. The outage highlighted the region's vulnerability to widespread outages and grid instability that come with the global transition to increased electrification and renewable energy The disaster spread to banking and communications networks, transportation systems, and critical infrastructure such as hospitals which were forced to rely on back-up generators to continue operation.

In 2024, low-carbon sources like wind, solar and nuclear power accounted for 82 percent of Iberia’s power, placing it well ahead of all advanced economies in terms of decarbonization efforts.  Solar and wind made up 70 percent of the electricity generated in Spain and 45 percent in Portugal during the blackout. Days before the disaster, Spain confirmed that renewables fully met electricity demand across the nation for the very first time.  After the blackout, international finger-pointing began, aimed at blaming an overreliance on renewables as the cause of disaster.

Spain is connected to France via sparse power cables, while Portugal is completely reliant on Spain. Hence, the Iberian Peninsula’s unique position as an “energy island” relative to the rest of mainland Europe and a high share of renewables make it a model for the EU’s green transition. This status also allows decreased reliance on Russian energy imports, a key pillar of security during the 2022 European energy crisis spurred by Moscow’s invasion of Ukraine. Because of low energy interconnections with the rest of Europe, the European Commission approved the “Iberian Exception Mechanism” which decoupled electricity prices from the market prices of natural gas. It effectively buffered electricity rates for consumers despite price volatility, offering an example of how high shares of renewables can reduce dependence on fossil fuel imports from heavy-handed nations like Russia.

Causes of the outage remain to be seen—both Spain and the EU have launched separate investigations into the incident. Since both countries are at the forefront of the European energy transition, it is possible that they have increased grid vulnerability that gave way to large-scale generation loss and disconnection from the French grid. While causes can be attributed to factors such as the peninsula’s position as an energy island, “anomalous oscillations” in the power flow, or a lack of stored rotating energy (system inertia) in the power grid, the crisis reveals resilience gaps in advanced economies like Spain and Portugal that lack sufficient backup systems. Restoration required a “black start” which utilized internal generation and limited interconnections with Morocco and Spain for recovery.

Grids send electricity from centralized plants to homes and businesses, but the transition to renewables demands investment in distribution and system upgrades to ensure generation balance and reliability. The world must add 80 million kilometers of grids by 2040 to meet climate targets and ensure energy security. Fossil fuel-based systems have been historically better equipped to manage risks such as plant failures or fuel shortages. Power systems like this supported centralized generation and one-directional power flows that reflected the stable climate conditions of the past. The risk of a single event triggering widespread power cuts increases with extreme weather patterns and geopolitical tensions.

Additional risk factors include rising electricity demand driven by rising needs for cooling mechanisms, increased electric vehicle use, and energy-intensive data centers. If global temperatures continue to rise, climate hazards, from water to heat stress, will become drivers of loss of power generation without a rapid transition to renewables and robust contingency planning. Europe is the fastest warming continent on the planet, and Iberia is particularly prone to climate-related events from deadly floods to rampant forest fires—realities that convey the urgency for policy action in supporting the energy transition. Similarly, climate disasters in the US, from wildfires in California, extreme cold in Texas and lightning in Illinois mean that the US is facing similar pressures to strengthen its own grid resilience.

Energy bottlenecks in both Iberia and states such as Texas occur due to their relatively isolated grids. To prevent future blackouts, resource interconnectedness must be prioritized across state and national borders. For instance, in the case of the 2021 Texas hurricanes, power sharing with other regions could have saved $100 million in damages per gigawatt of interconnection.

As the use of renewable energy grows, enabling more decentralized, regional operations to connect populations in areas prone to blackouts is essential. The Iberian outage illustrated that inertia was missing, a feature at the heart of the fossil fuel system. Technologies such as battery energy storage, thermal energy, and allowing electricity sharing during crises will provide solutions to the reliability and storage challenges unique to renewables. Decentralization also allows distributed sources such as customer-generated rooftop solar to supply electricity when the grid is strained, as in the case during a 2022 California heat wave.

The practice of burying power lines rather than hanging them above ground, or undergrounding, is a form of preventative, grid-hardening measures against climate hazards. Disasters like high wind and extreme temperatures can ruin above-ground lines, while ones buried underground are immune to changes in the weather.  In Florida, communities with underground lines fared much better than those with above ground lines during hurricanes.

The transition to renewables must redefine energy system planning and power infrastructure design. Distancing policy from fossil fuel centric frameworks will require both adding renewables to existing systems and subsequent transformation of the systems themselves. Iberia’s example underscores that the transition to renewable is not just about replacing fossil fuels with solar and wind, but a reimagining of how power grids are operated, designed, and protected. As climate change continues to intensify and demand for electricity increases, the solution lies in whether nations can build the infrastructure needed to support the interconnected and resilient electrified energy systems of the future. Resilient grid systems will offer even the most vulnerable, rural communities security amid growing climate and energy pressures.