Spanish Blackout April 2025 - what can we learn about Red Electrica's risk mitigation strategy?

This is a reblog of a post originally posted by the author on linkedin - available below.

https://www.linkedin.com/feed/update/urn:li:activity:7322920542334808065/

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Like many people I'm watching the news from Spain unfold as it tackles a highly unusual nationwide blackout and interested to understand the root cause. 🤞 things return to normal soon given the impact to public services and livelihoods.

Many including Portugal's grid operator have been quick to point to weather conditions being the cause. REN said: “Due to extreme temperature variations in the interior of Spain, there were anomalous oscillations in the very high voltage lines (400 kV), a phenomenon known as ‘induced atmospheric vibration’. These oscillations caused synchronisation failures between the electrical systems, leading to successive disturbances across the interconnected European network.”

Although there are some sceptics of climate causing the blackout predictably as ever the renewable energy trolls are quick to emerge - blaming Spanish national grid operator Red Eléctrica (Redeia) for excessive net zero investment, a lack of wind, lack of sun and probably DEI policies next.

Whether the cause is cyberattack, unseasonal temperature or something else when a cause is identified investors, lenders & other analysts will pour over the company's operational policies, energy mix and risk management approach to determine whether the blackouts could have been prevented or better mitigated. Including whether green policies have impacted this.

This type of rapid analysis to try and 'front run' official findings and public opinion used to take weeks before the advent of AI Large Language Models 🤖 Not any more...I took a quick look in our Responsible Capital platform 🔍

We cover almost 500 financial & sustainability disclosures for Red Eléctrica. A few short prompts and rapidly you can start to build up a picture of the company's capital structure, energy mix, risk mitigation steps and business continuity plans.

Red Electrica are 20% owned by the Spanish state, 80% owned by institutional investors and, as with many power companies, are highly active in labelled / sustainable debt markets. 🌿

Redeia has a green financing framework through which it issues green financial instruments to finance eligible projects. Redeia's green bonds are aligned with the Green Bond Principles (GBP) and the Green Loan Principles (GLP). In January 2024, Redeia issued its fourth green bond, a 10-year transaction reaching 66% of the financing linked to ESG criteria.

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RC Disclosure Assistant:

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📰 Summarised its business continuity plan including cybersecurity & climate change adaptation

🔌Found disclosures on Physical Climate risks & mitigations - including temperature variations affecting overhead power lines and PV generation.

🔋Identified a Renewable vs Non-renewable energy mix of 59.9% vs 40.1%

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Check out the Red Electrica profile yourself at:

https://responsiblecapital.io/profile/d78de395-5faa-376c-ba3d-68ee29d4d7e6

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#climateadaptation #climatechange #businessresilience #esg #blackout

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