Los Guájares Hydroelectric Plant: 357 MW Authorized in Granada

Key data

The reversible Los Guájares hydroelectric plant becomes one of the largest energy storage facilities authorized in Spain in recent years. The Resolution of September 16, 2026, from the Directorate General for Energy Policy and Mines formalizes the dual authorization—prior and construction—in favor of Hidroeléctrica Los Guájares, SLU, published in the Official State Gazette on October 28, 2026.

The project, whose processing began in 2020 under the promoter Villar Mir Energía and was later transferred to the current holder, has completed an administrative and environmental process of more than six years before obtaining final approval.

What does this regulation establish?

The resolution simultaneously grants two administrative authorizations for the same project:

• Prior administrative authorization: certifies the project's viability and its compatibility with national energy planning.
• Construction administrative authorization: enables the effective start of the facility's works and associated infrastructure.

The reversible hydroelectric plant functions as a large battery: during hours of excess electrical generation (especially renewable), it pumps water to the upper reservoir consuming 363.99 MW; during peak demand hours, it generates electricity by turbinating that water up to 356.93 MW. This model is key for electrical system stability and renewable energy integration.

The company must comply with strict environmental conditions derived from the favorable Environmental Impact Declaration issued in August 2025, in addition to coordinating with Enagás the modification of the Granada-Motril gas pipeline route, whose current path is affected by the plant's works.

Economic and operational impact

For Hidroeléctrica Los Guájares, SLU, the authorization opens the construction phase of a large-scale infrastructure. The main vectors of economic and operational impact are:

• Construction investment: a reversible plant of this capacity (above 350 MW) implies investments that in comparable projects in Spain have exceeded 400-600 million euros, although the resolution does not detail the specific amount of the project.
• Own evacuation infrastructure: the company must build and finance the substation and 220 kV evacuation line, adding technical and financial complexity to the project.
• Coordination with Enagás: the modification of the Granada-Motril gas pipeline route involves an additional engineering and negotiation process that may affect the construction schedule and budget.
• Environmental conditions: compliance with conditions derived from the favorable EIA of August 2025 will generate environmental monitoring costs, corrective measures, and possible compensations during the construction and operation phases.
• Market opportunity: with 356.93 MW of generation capacity, the plant will be able to actively participate in electrical system adjustment service markets, where reversible hydroelectric storage has high valuation.

Who does it affect?

• Hidroeléctrica Los Guájares, SLU: authorization holder and responsible for executing the project and complying with all imposed conditions.
• Enagás: must coordinate and execute the modification of the Granada-Motril gas pipeline route affected by the works.
• Municipalities of Vélez de Benaudalla, El Pinar and Los Guájares (Granada): territories where the facility will be located, with impact on territorial planning, local employment, and economic activity during construction.
• Electrical system operators and energy retailers: the entry into operation of new storage capacity of this magnitude will have effects on grid management and wholesale market prices.
• Construction and engineering companies: the project will generate tenders and contracts for civil works, electromechanical, and high-voltage lines.
• Local and regional administrations in Andalusia: must coordinate permits, licenses, and environmental monitoring during execution.

Practical example

Imagine that Hidroeléctrica Los Guájares, SLU, begins the construction phase in 2027. During the works, it detects that the Granada-Motril gas pipeline route operated by Enagás runs through an area where the central's tunnel excavation is planned. In that scenario, the company must activate the coordination protocol with Enagás—expressly required by the resolution—to agree on the new gas pipeline route before initiating earthworks in that area.

If this process is delayed or not managed correctly, works could be halted in that area, with consequent cost overruns from unplanned stoppages and possible contractual penalties. The resolution imposes this coordination as a condition of the authorization, meaning that non-compliance could compromise the validity of the construction authorization itself.

On the other hand, once operational, the plant will be able to generate electricity during peak market hours, generating revenue from energy sales, and pump during off-peak hours taking advantage of low prices, optimizing energy arbitrage margins.

What should companies do now?

1. Hidroeléctrica Los Guájares, SLU: review in detail the environmental conditions imposed in the favorable EIA of August 2025 and integrate them into the work plan and project budget before initiating any action on the ground.
2. Initiate formal coordination with Enagás to agree on the new Granada-Motril gas pipeline route affected. This procedure is an express condition of the authorization and must be resolved before works reach the interference zones.
3. Plan the evacuation infrastructure bidding: the own substation and 220 kV line are critical elements whose engineering and construction must be coordinated with Red Eléctrica de España (REE) to guarantee the connection point.
4. Construction and engineering companies: be alert to tenders called by the holder, as a project of this magnitude will generate large-volume contracts for civil works, electromechanical, and high-voltage.
5. Local administrations of the three municipalities: prepare work license procedures and environmental monitoring in coordination with the Junta de Andalucía to avoid administrative bottlenecks during the construction phase.

Official source

Consult complete regulation in official source

Notice: This article is purely informational in nature and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://www.boe.es/diario_boe/txt.php?id=BOE-A-2026-22600