Energy Transition

What we can learn about building a resilient energy grid from the Iberian power outage

A local police car patrols a shopping street without electric lighting to prevent theft and looting in the stores in the early morning hours during a power outage which hit large parts of Spain, in Ronda, Spain April 29, 2025. REUTERS/Jon Nazca

The major power outage in Spain and Portugal affected millions. Image: REUTERS/Jon Nazca

Eleni Kemene
Lead, Industry Decarbonization, Chemicals Sectors, World Economic Forum
Anne Christianson
Resilience And Adaptation Lead, Resource Systems and Resilience, World Economic Forum
  • The Iberian Peninsula power outage highlighted the reliance of modern society on electricity when it suffered Europe's largest blackout in years.
  • Such disruptions are likely to become more frequent amid rising demand for electricity, the clean energy transition and extreme climate events.
  • Fortunately, a suite of solutions exist for the private and public sector to avoid future costly energy disruptions and help build power resilience.

How can modern society operate in a world without electricity? The Iberian Peninsula recently faced the stark reality of this challenge, when it suffered Europe’s largest blackout in two decades.

April’s outage left tens of millions of people in Spain and Portugal without power and impacted transport, banking and communication networks, while hospitals relied on back-up generators.

This was not the first disruptive power outage in Europe this year. In March, London Heathrow Airport closed after a fire at the only substation providing power to one of the world’s busiest transport hubs, cancelling flights and leaving thousands of homes without electricity. The cause of the blaze remains unknown, but the overall cost to the airline industry is estimated at over £60 million ($78 million).

Both incidents highlight the urgent need to improve the overall preparedness and resilience of power systems, amid rising global electricity demand, the clean energy transition and increasingly frequent hazardous climate events.

The good news is that solutions exist for the private and public sectors to avoid future costly energy disruptions.

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What happened in the Iberian power outage

The Iberian power cut on 28 April served as a wake-up call for grids.

Before exploring what happened that day, one must understand that a secure and reliable power system operates within a constant voltage range, maintains specific frequency thresholds and continuously balances supply and demand.

In addition, stability and security are often enhanced by the connection of national grids across borders. In this case, Spain’s is connected to France and Portugal to enable electricity trading and enhance security.

What we currently know about the incident is as follows, as presented by EPRI and ENTSO-E:

  • Around 12.30pm CEST an event similar to loss of generation occurred. Typically, such events lead to a mismatch between power supply and demand, causing the grid frequency to drop. The system relies on inertia, backup generation but also disconnecting loads to respond. Here, the system reacted as expected.
  • Shortly afterwards, a second event occurred similar to loss of generation. Generation occasionally trips/disconnects to protect equipment from physical damage in response to overvoltage, which can be caused by frequency fluctuations or other grid instabilities.
  • Seconds later, the Spain–France interconnection was interrupted due to grid instability. At the time, Spain was an exporter of electricity, so the interruption meant Spain could no longer export this excess power, resulting in surplus generation within the country. The Spanish power grid then collapsed, followed by the Portuguese grid.

Various theories on what caused or contributed to the incident have been mooted, including speculation that renewable energy was to blame. Theories such as interarea oscillations, cyberattacks and rare atmospheric phenomena have been eliminated.

Spanish transmission system operator Red Eléctrica and the European Commission have launched separate investigations into the incident. But, regardless of the cause, the outage highlighted how power grids need to be more resilient and futureproofed.

Power systems face dual pressures

In advanced economies such as Europe and North America, power systems were designed supporting central generation and one-directional power flows, built to suit a stable climate that no longer exists. These systems need to be updated to address today’s energy realities, which include:

  • Rising electricity demand driven by increasing population needs, electrification of end uses, expansion of energy-intensive data centres to support AI, increasing cooling needs (for equipment and people) and adoption of electric vehicles.
  • Decentralized renewable energy sources, like solar and wind, which use electronic devices called inverters instead of engines. Unlike traditional generation, these don't have the inertia – or natural 'momentum' – that helps keep the grid stable. Inertia from synchronous generation reacts instantly by releasing kinetic energy.
  • Climate hazards, particularly extreme heat and water stress, are already disrupting power generation and set to become the major drivers of losses and stress in our power systems. By one estimate, if global temperatures surpass 2ºC above pre-industrial levels, which they are expected to do by 2045, US nuclear and EU thermal power plant capacity could suffer a decrease in capacity of 4.5%. Without an immediate and rapid transition to renewables globally, climate hazards will soon become chronic stresses to energy systems.

Such pressures are not insurmountable. Redundancy and contingency planning can evolve and ensure the functioning of current infrastructure. These challenges must also not slow the clean energy transition – instead, strengthening resilience is essential to advancing the shift to low-carbon power, while withstanding the dual pressures of rising demand and escalating climate threats.

Resilience is the new frontier of energy policy

Incidents like the Iberian blackout ultimately reveal deeper resilience gaps. Power systems have embedded resilience by design; however, in the current landscape, this must be enhanced. There are a suite of solutions to support this:

Adding system inertia

Iberia’s outage showcased that inertia was missing in the system. As fossil fuels are replaced by cheaper and cleaner sources of energy, the energy grid must adapt to new reliability and storage challenges, which can be addressed by technologies like pumped hydro storage, battery energy storage systems, flywheels and synchronous thermal energy.

Increased deployment of renewable energy sources can strengthen the system’s resilience by decentralizing power generation. Looking ahead, new types of grid support services may also emerge across jurisdictions to provide both inertia and flexible backup power when needed.

Strengthening interconnections

To strengthen grid reliability and prevent blackouts, policy-makers should consider connecting power grids across national borders. Interconnections can be part of a multilayered resilience strategy, enabling the sharing of electricity resources during emergencies, with added benefits such as market competitiveness.

Although in the case of the recent blackout interconnections were more of a contributing factor and Portugal was subsequently affected, in other cases like the Texas hurricanes in 2021, power sharing with other regions could have saved nearly $100 million in damages per gigawatt of interconnection. Such strategies require cross-border collaboration, grid code harmonization and robust regulatory frameworks.

Developing storage and smart infrastructure

The system must also deploy storage solutions to complement renewable generation and provide firm power, or act as a fast response in case of an electricity mismatch. Building system flexibility through smart infrastructure, demand-side management and decentralized microgrids can help ensure a dynamic and secure energy grid.

At the same time, grid operators must ensure that clean energy is both available and able to stabilize the grid – ideally using grid-forming inverters. These investments can be utilized in response to climate hazards as well.

Addressing climate hazards

Various actions can be taken to address climate hazards. Preventative measures, including sustainable vegetation management, weather monitoring and forecasting of dynamic line rating, could proactively mitigate risks and losses.

As listed utilities companies are expected to suffer climate-induced losses to property, plant and equipment by 2035 of between $33-37 billion, heat-resistant infrastructure and cooling technologies are also needed.

Meanwhile, AI and real-time data can be leveraged for tech-driven solutions such as climate impact modelling or energy early warning systems, which use Earth observation and internet of things sensors to identify climate hazards along the value chain before the grid infrastructure is compromised.

Governance

The operational needs of energy systems must also be tackled. To maintain energy security, it is essential to define clear roles, incentives and regulations throughout the electricity sector.

This can be done by institutionalizing responsibilities and incentives, while systematically identifying and mitigating risks, strengthening both prevention and recovery mechanisms.

Discover

What's the World Economic Forum doing about the transition to clean energy?

Cross-industry collaborations can enable sharing of best practices and drive collective progress towards climate adaptation and system resilience, while public-private partnerships can drive a systemic approach to energy generation, transition and resilience to avoid large-scale blackouts.

These proactive strategies strengthen grid resilience and provide reliable electrical infrastructure. Without them, communities and businesses will continue to face disruptive and costly power failures like the Iberian blackout. By working together, we can transform today’s energy vulnerabilities into tomorrow’s adaptive advantage.

The authors would like to thank Marta Wilhelmi Corona (ECP 2025, Climate Resilience and Adaptation) and Flora Mccrone (Lead, Immersive Interactions, Centre for Nature and Climate) for their valuable contributions and feedback.

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