New review commends national ambition but warns transport and construction must improve.
In its first review of Spanish energy policy for six years, the International Energy Agency (IEA) has noted the country’s significant progress towards a renewable future and solving long-standing tariff deficits in its electricity and gas sectors.
The changes undertaken in the last six years have allowed Spain to focus on the policies needed to transition to climate-neutrality. Its new framework for energy and climate would see the country move to 100% renewable electricity before 2050. When non-electric energy is included, Spain will bring down non-renewable energy to just 3% of its whole energy mix.
While that target is still some way off being achieved, the report notes the significant progress made already. The rapid closure of coal facilities had seen coal fall to just 5% of all electricity generation by 2019 while the total electricity mix has transitioned from less than a quarter renewable to 42% in just the last ten years. That was achieved despite several years of restricted investment finance availability, which has recently started to ease.
Much of Spain’s policy is centred on growing its solar and wind generation, alongside programmes to improve energy efficiency, expand electrification and promote renewable hydrogen. This is now also being tied into the government’s plans to stimulate the economy, enhance competitiveness and improve energy security – something that has driven great success in other Mediterranean countries like Turkey in recent years.
Energy efficiency is also a major focus in Spain and the IEA reports the country has done well in decoupling energy consumption from economic growth. The ratio of energy consumption to GDP has been falling by almost 2% per year since 2008 and new policies are now being proposed that will continue or accelerate that trend.
While the IEA is positive about the prospects for Spain to meet its energy ambitions, it does highlight a number of challenges ahead too. Among those challenges is the extent to which fossil fuels are still dominant in some key sectors like transport, industry and building, where progress towards decarbonisation has been slower.
Growth in renewables will also need to be especially strong over the coming ten years because nuclear power makes up more than 20% of energy capacity in Spain and more than half of its reactors are set for decommissioning by 2030.
Finally, the report suggests that Spain’s decentralised system of government will need to be reflected in future policy efforts. Regional administrations have considerable authority over energy policy so establishing strong co-ordination across internal borders is a key IEA recommendation.