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Spain's housing shortage hits another bizarre obstacle as lack of electricity capacity blocks 80,000 homes
New homes planned in provinces like Murcia, Alicante and Valencia are being held up because the electricity grid can’t currently support them
Spain desperately needs more homes, yet thousands of properties that could help ease the country’s housing shortage are being held up by a rather unexpected problem: there isn’t enough electricity capacity to connect them to the grid.
A new report from BBVA Research has found that more than 80,000 planned homes across at least 12 Spanish provinces are dependent on new electricity infrastructure before they can go ahead. The areas affected include Murcia, Alicante, Valencia and Madrid, alongside Castellón, Toledo, Granada, Cádiz, Almería, Zaragoza, Lleida and Jaén.
The problem isn’t that Spain as a whole is running out of electricity. Instead, the available capacity isn’t necessarily where new housing is being built, meaning large developments can require new substations or upgrades to the existing network before construction can progress.
That can create a particularly frustrating situation in areas where demand for housing is already far greater than supply.
BBVA Research explained that expanding the electricity grid for major urban developments can take five to eight years, with planning, bureaucracy, environmental assessments, land purchases and infrastructure construction all adding to the timetable.
In Madrid, for example, land identified for development over the next five years could accommodate around 126,000 homes, while the existing housing deficit is estimated at 116,000. However, current electricity capacity would only be enough to supply roughly 40,000 of those properties.
Alicante is facing a similar problem, with major developments including PAU 5, Vistahermosa/Nou Nazareth, Benalúa Sur and San Blas requiring additional investment in the electricity network.
The situation is also particularly relevant in the Region of Murcia, where BBVA Research found that virtually all of the major developments it examined will need new electricity infrastructure before they can be completed.
For a country already struggling to build enough homes, the delays add yet another obstacle to increasing supply. The shortage has pushed housing costs sharply higher in many parts of Spain, while growing numbers of residents and would-be buyers are competing for a limited number of properties.
The electricity problem could also become more difficult in the coming years. BBVA Research expects demand for electricity to rise by around 45% by 2030 as homes, transport, industry and data centres become increasingly dependent on the grid.
The government approved measures in July aimed at mobilising up to €17.9 billion in additional investment in electricity networks by 2030. BBVA Research considers this a step in the right direction, although it warned that the impact will depend on how quickly and effectively the investment is actually delivered.
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