Is Your Electrical Power On-Site Enough?

What to do when there is not enough electrical power on-site

Understanding the Power Demands of Construction

Construction is energy intensive, with lots of elements of the build requiring power to move the project forward. Plus, where a development of apartments, villas, or industrial units are being created, this will be a significant draw on the grid, which the system may not be able to offer.

The energy needs of the project during and after construction should be understood during the planning phase and the choice of plot, as well as the area, has to be made with energy supply in mind. If you don’t choose carefully, or haven’t factored in the need to generate power to supplement the grid, you may get a very nasty surprise.

That’s because, in Spain when the grid supply is insufficient in your area, the construction project is obliged to add in a transformer station. It is both a technical necessity, to ensure adequate power, and a legal requirement, because utility companies will not authorize the connections without it.

Developers must anticipate this early in the design phase to avoid delays and cost overruns. In this blog, we’re drawing on more than 25 years of experience and knowledge, to explain the situation.

Plan for Energy Needs Early!

Why a Transformer May Be Required

On many construction sites in Spain, the available supply from the local utility (Iberdrola, Endesa, Sevillana, Naturgy, etc.) is insufficient to power cranes, hoists, concrete pumps, elevators, and site cabins. Also, the new project being built may also risk overloading the system with the draw from the completed units in the project.

In such cases, a dedicated transformer station (centro de transformación) must be installed to step down medium voltage to low voltage for construction equipment use and later supply. The transformer can be temporary (for the works) or permanent (for the finished building) depending on project needs.

When the Local Grid Can’t Cope

If the demand exceeds what the local low-voltage grid can provide, the utility company obliges the developer to install and finance the addition of a transformer station. This is common for large developments (residential blocks, commercial centres, hotels, hospitals, logistics warehouses) and, in our experience, any project in excess of 20 units may need attention.

In these cases, the developer or constructor must finance and build the transformer station to the utility’s specifications, then cede the installation to the electricity supplier after commissioning. The utility company then owns and maintains it.

Alternatively, some utility companies offer a service to build transformer stations for projects or businesses with high energy demands. They manage this as a turnkey project and take care of everything, so this can be an option worth exploring if your project will need a transformer.

New buildings often must reserve a dedicated room or space for the transformer (usually on the ground floor, with street access and a surrounding passageway), so ensure you leave a sufficient space in your plans.

Temporary vs. Permanent Transformers

A dedicated transformer station (Centro de Transformación) steps down medium voltage to low voltage for both construction and long-term use.

Temporary transformers: Used only during construction. Permanent transformers: Integrated into the final development to power the finished buildings.

How Much Does a Transformer Station Cost?

Installing a transformer (plus civil works, protection systems, and cabling) can significantly increase project costs and should be identified and catered for in your Cost Plan and related cashflow projections.

The cost to build a dedicated transformer station in Spain is highly variable, ranging from tens of thousands to some millions of euros, depending on the capacity, number and complexity. A dedicated transformer station for a smaller industrial or commercial project could cost approximately €100,000 to €3 million, while a large-scale substation could cost significantly more. The final price is determined by factors like voltage, size (kVA/MVA), location, and required safety clearances, which influence the cost of equipment, construction, channelling, easements and land.

The cost of the transformer itself varies widely based on its capacity and voltage rating.

For a 1 MVA transformer, prices range from about €10,000 to €120,000+ depending on the voltage.

Larger, high-capacity transformers can cost over €1 million.

There are construction and land costs to factor in, as well as costs such as design and engineering fees, installation of switchgear and control systems, foundation and civil works, grid connection fees and permissions and environmental assessments.

How Long Does It Take to Build a Transformer Station?

Building a dedicated transformer station in Spain typically takes 18 to 36 months, depending on the project’s complexity and permit process.

This includes feasibility and design studies, the process needed to get the correct permits and approvals, which can take 6-12 months, procurement and contracting, construction and commissioning and grid integration, which can take another 6-12 months.

Large-scale projects (e.g., 220 kV or 400 kV) may take longer due to stricter regulatory oversight and grid coordination.

How can we help? Real Project Examples from MDCI

We have supported several clients with power-related issues. Here are just three examples of how we were able to resolve the situations and enable to project to be successfully completed.

Tenerife Resort: Opening on Schedule with Temporary Power

MDCI project managed the development and opening of a fully functioning resort in Tenerife.

The area was undersupplied by power, so we were obliged to install an emergency generator to enable the resort to open on time. This required a series of applications and authorisations from the power company, so it was vital that timely actions were taken to coincide with the arrival of guests as per their opening plan.

After a period of 6 months, the local supply cables were laid by the utility company so the generator could be retired to its original purpose of emergency only. However it served to enable the resort to get up and running and generating income for the investors.

Luxury Villa Community: Planning for Power Early

MDCI were commissioned by an American developer to project manage and deliver a gated community of 18 luxury villas in Spain. The local area had insufficient power supply to cater for the project, so a transformer station was required. As this was known in advance, this requirement was integrated into the design, bidding and implementation phases of the project.

Plenty of time should be allowed for the utility company to perform their checks on the installation and to provide the necessary connection cables to the site. This should not be underestimated, as without the correct power installations and permissions, you will be unable to gain your First Occupation Licences.

800-Unit Development: Powering a New Urban Area

MDCI were instrumental in the roll out of a new area of over 1,000,000m2 and its required infrastructure of roads, drains, bridges and power supply. Due to its size and lack of previous infrastructure, it required 11 concatenated transformer stations to supply a projected 800 units. The technical obligations and administrative permissions required deft handling and coordination with the various authorities. Be aware of the slow-moving process and allow for this in your programming to enable completion on time and on budget.

How MDCI Can Support Your Project

MDCI helps developers identify and address power supply issues before they become costly delays.

A Project Developer like MDCI can work with you in the planning stages to create a detailed feasibility study. This will include cost projections, cash flow projections, land valuation and licensing, due diligence investigation and fulfilment.

During this investigation we will determine whether you will have additional power needs and if these could be overcome using diesel generators, solar power and/or by renting a temporary MV/LV transformer cabin, or if you will need to build a transformer station.

If this is a requirement the feasibility study will cost this work, in the area you’re planning, to see whether this will be a barrier to a profitable project, or whether the budget can be made available, while still ensuring that it is an attractive investment and shareholders will see returns.