By Ion Jauregui – ActivTrades Analyst
Redeia (REE), operator of the Spanish electricity system and a member of the Ibex 35, has returned to the media and regulatory spotlight following the recent blackout that affected much of the southwestern part of the country. Although the government praised Red Eléctrica’s technical management during the event, everything points to a planning error in the electricity mix that left the system without sufficient response capacity during a period of high renewable energy production.
The incident occurred with more than 70% of the energy mix generated by renewable sources, particularly solar and wind, which lack the inertia provided by conventional technologies such as hydro or thermal. The absence of sufficient synchronous capacity and effective storage systems made it difficult to maintain frequency and voltage balance, triggering a preventive disconnection of part of the grid. This has reopened the debate on the urgent need for investment in technologies that can provide system stability, such as batteries and hybrid generation.
Solid fundamentals, but under closer scrutiny
Despite the episode, Redeia’s financial fundamentals remain strong. In its latest quarterly report, covering the end of 2024, the company reported:
• Revenue: €2.17 billion (+3.2% year-on-year)
• EBITDA: €1.65 billion
• Net profit: €680 million (+1.7%)
• Net debt: €4.9 billion, with a stable debt/EBITDA ratio of 3x
The company maintains a stable shareholder remuneration policy, with a dividend of €1 per share expected in 2025, representing a dividend yield of around 5.5% at current prices.
Additionally, Redeia continues with its 2021–2026 strategic plan, which includes a total investment of €4.4 billion, 75% of which is allocated to grid modernization, renewable integration, and storage systems. The company has reinforced its role as a facilitator of the energy transition, but incidents such as the recent blackout highlight that operational planning and technical capabilities must evolve in step with renewable growth.
Market reaction
Following the blackout, Redeia’s share price corrected by 2.3% over two sessions, settling around €18.10, although it still shows positive performance year-to-date. Volatility has slightly increased, reflecting uncertainty about potential regulatory consequences or adjustments to oversight mechanisms. Nonetheless, a moderately positive view of the stock remains, given its defensive profile, low correlation with the economic cycle, and ability to generate stable cash flows.
Technically, the stock has been climbing above the support at €17.61. The gap-down correction on Wednesday does not appear likely to halt the expanding moving average trend that began on February 18. The point of control (POC) is located at €16.80 in the previous accumulation zone, but the current price formation does not seem constrained. A return to the path of recent highs would be reasonable. RSI is slightly oversold at 48.70%. Current delta zones are slightly above the current price, around €18.74, suggesting potential gains if news flow is supportive and avoids negative sentiment dragging the stock down.
In conclusion, the blackout represents a reputational and technical challenge for Redeia, but it does not significantly alter its financial profile. The medium-term key will be its ability to invest in operational resilience and maintain the confidence of both regulators and the market.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.
Redeia (REE), operator of the Spanish electricity system and a member of the Ibex 35, has returned to the media and regulatory spotlight following the recent blackout that affected much of the southwestern part of the country. Although the government praised Red Eléctrica’s technical management during the event, everything points to a planning error in the electricity mix that left the system without sufficient response capacity during a period of high renewable energy production.
The incident occurred with more than 70% of the energy mix generated by renewable sources, particularly solar and wind, which lack the inertia provided by conventional technologies such as hydro or thermal. The absence of sufficient synchronous capacity and effective storage systems made it difficult to maintain frequency and voltage balance, triggering a preventive disconnection of part of the grid. This has reopened the debate on the urgent need for investment in technologies that can provide system stability, such as batteries and hybrid generation.
Solid fundamentals, but under closer scrutiny
Despite the episode, Redeia’s financial fundamentals remain strong. In its latest quarterly report, covering the end of 2024, the company reported:
• Revenue: €2.17 billion (+3.2% year-on-year)
• EBITDA: €1.65 billion
• Net profit: €680 million (+1.7%)
• Net debt: €4.9 billion, with a stable debt/EBITDA ratio of 3x
The company maintains a stable shareholder remuneration policy, with a dividend of €1 per share expected in 2025, representing a dividend yield of around 5.5% at current prices.
Additionally, Redeia continues with its 2021–2026 strategic plan, which includes a total investment of €4.4 billion, 75% of which is allocated to grid modernization, renewable integration, and storage systems. The company has reinforced its role as a facilitator of the energy transition, but incidents such as the recent blackout highlight that operational planning and technical capabilities must evolve in step with renewable growth.
Market reaction
Following the blackout, Redeia’s share price corrected by 2.3% over two sessions, settling around €18.10, although it still shows positive performance year-to-date. Volatility has slightly increased, reflecting uncertainty about potential regulatory consequences or adjustments to oversight mechanisms. Nonetheless, a moderately positive view of the stock remains, given its defensive profile, low correlation with the economic cycle, and ability to generate stable cash flows.
Technically, the stock has been climbing above the support at €17.61. The gap-down correction on Wednesday does not appear likely to halt the expanding moving average trend that began on February 18. The point of control (POC) is located at €16.80 in the previous accumulation zone, but the current price formation does not seem constrained. A return to the path of recent highs would be reasonable. RSI is slightly oversold at 48.70%. Current delta zones are slightly above the current price, around €18.74, suggesting potential gains if news flow is supportive and avoids negative sentiment dragging the stock down.
In conclusion, the blackout represents a reputational and technical challenge for Redeia, but it does not significantly alter its financial profile. The medium-term key will be its ability to invest in operational resilience and maintain the confidence of both regulators and the market.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.