The 2025 Iberian Peninsula blackout: lessons for modern power systems and policy implications

Hugo Morão

No 2026/0413, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: On April 28, 2025, the Iberian Peninsula experienced a complete electrical blackout affecting 47 million people across Spain and Portugal. Drawing from the ENTSO-E investigation, this paper examines the policy implications of this event for power system management during rapid decarbonization. The investigation identified an unprecedented cascade of generation disconnections triggered by overvoltage conditions, tracing the root cause to institutional rather than technical failures: regulatory barriers prevented the utilization of renewable capacity with certified voltage control capability, market design incentives misaligned operational decisions with real-time stability requirements, and governance fragmentation impeded coordinated crisis response. These findings offer lessons for policymakers navigating the tension between market efficiency and system security in renewable-dominated grids.

Keywords: power systems; power blackout; renewable energy integration; electricity market design; grid services; energy policy. (search for similar items in EconPapers)
JEL-codes: D47 E65 F15 L94 N74 Q54 (search for similar items in EconPapers)
Date: 2026-04
New Economics Papers: this item is included in nep-ene and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp04132026

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