Spain must accelerate electrification across transport, buildings and industry to fully capitalise on its renewable energy expansion and meet its climate targets, according to a new International Energy Agency (IEA) Energy Policy Review.

The report highlights Spain’s progress between 2015 and 2025, during which renewables increased their share of electricity generation from 35 per cent to 56 per cent, while emissions declined by approximately 20 per cent.

The country's energy and climate policies, supported by a focus on job creation, regional development and social inclusion, have helped drive the transition.

Renewable energy expansion has also strengthened energy security, reduced dependence on imported fuels and contributed to lower wholesale electricity prices.

Without the growth in renewable capacity, Spain’s natural gas imports for power generation would have been nearly 40 per cent, or $26 billion, higher in 2024.

However, imported energy still accounted for almost 70 per cent of Spain’s total energy consumption in 2024, highlighting the need to extend the transition beyond electricity generation.

The IEA identifies electrification as a key priority, noting that electricity currently represents just 25 per cent of Spain’s final energy consumption, below its target of 35 per cent by 2030.

Electric vehicle adoption remains relatively limited, particularly among corporate fleets, while fossil-fuel heating is still widespread and industrial electrification faces high upfront investment costs.

The report also highlights the impact of taxes, levies and network charges on electricity prices, which remain comparatively high against fossil fuels.

Spain is taking steps to address this imbalance, including abolishing the electricity production tax in 2026.

Further reforms could encourage households and businesses to adopt electric technologies while protecting vulnerable consumers.

Progress is also being made in energy storage, demand-side flexibility and grid reforms.

The IEA recommends continued investment in power infrastructure and a balanced mix of wind, solar and hybrid technologies to improve system flexibility and resilience.

The review also stresses the importance of managing Spain’s planned nuclear phase-out carefully to maintain security of supply.

Following approval to extend the operation of the Almaraz nuclear power plant, it recommends a transparent framework for future case-by-case decisions based on costs and benefits for consumers and the wider electricity system.

The IEA concludes that Spain’s next challenge is to transform its renewable energy leadership into a fully integrated and resilient energy system through faster electrification, modernised grids and improved energy flexibility, offering lessons for other countries pursuing clean energy transitions. -OGN/TradeArabia News Service