Due to an irreversible energy transition, the switch to renewable energy is enabling power networks, including Spain’s, to move away from fossil fuels.
In Spain, the green conversion is accelerating rapidly. With a capacity of 149 Terawatt hours (TWh) and an 11% increase in production, renewable sources accounted for 56% of the power mix in 2024, setting a national record. A significant milestone was reached when solar photovoltaics, which account for 17% of the electricity mix, moved up to third place, surpassing combined cycle sources. It lagged behind nuclear energy at 19% and wind energy at 23%.
With 13%, hydraulic energy is the fifth source. Fossil technologies witnessed a 24% reduction in the combined cycle, and coal is on the verge of going extinct, producing just 1.1% of electricity—the lowest proportion in history.
To reach the goal of 81% of the nation’s electricity supply coming from renewable sources by 2030, this increase in renewable energy is essential. At 134,649 gigawatt/hour (Gwh) as of November 22, 2024, renewable energy production surpassed the levels attained during the entirety of 2023, a year in which the generation cap was broken. Renewables accounted for 63% of the total installed power capacity, or 56% of the nation’s electricity supply.
With €603 million in capital deployed in the third quarter, Red Eléctrica recorded an 18% rise in transport network investments; the private sector has also adopted this trend. Green energy projects have already overtaken fossil fuels as the primary energy source in the domestic market. With a noticeable increase in alternatives like hydrogen, particularly green hydrogen, the projects mostly concentrated on solar and wind energy.
However, the obstacles are formidable. The IEA emphasises, the creation of international connecting and transport networks to export its renewable surpluses, the adaptation of electricity infrastructure to meet supply demands and the promotion of sectors like transport or energy-intensive needs such as heating, which must accelerate progress towards energy neutrality. According to its experts, Spain must thus continue to establish technology services, advance artificial intelligence, and step up regulatory reforms, “where it has launched several initiatives which are on the right track.”
The Green Algorithms Plan, which has been reviewed since 2021 and incorporates feedback from its multinational corporations, is one example. It is a component of the National AI Strategy (ENIA), which aims to develop an innovation ecosystem that anticipates highly dependable management models in its energy facilities. Based on actual technical data, green AI is essential for enhancing the contributions of renewable energy sources to the energy mix or modifying appropriate water flow rate controls in hydropower plants.
The implementation of ReFuelEU Aviation in January, which establishes SAF quotas for the use of sustainable aviation fuels ranging from 2% in 2025 to 70% in 2050, is also noteworthy.
The function of biomethane and green hydrogen
In this regard, energy companies are promoting decarbonisation through concrete projects. Moeve is a notable example, as they are investing three billion euros to build the Andalusian Green Hydrogen Valley, the most ambitious renewable hydrogen project in Europe, which is scheduled to begin this summer.
With a goal of 12 GW of electrolysis capacity by 2030, Spain highlighted green hydrogen as a crucial approach for decarbonising its economy in its updated Integrated National Energy and Climate Plan (PNIEC), which it presented to Brussels at the end of 2024.
This goal of the productive integration of green hydrogen by electrolysis from renewable sources and its consumption in industrial processes and local sites is shared by the dozens of initiatives that are expanding throughout Spain. This includes using it directly, substituting it for natural gas or grey hydrogen, turning it into methanol or ammonia, or using it as a fuel for transportation and decarbonisation in port settings.
Nonetheless, there is still room for development in Spanish sustainability by 2025. This is especially true in the field of electric vehicles, where advancement is still difficult. In Europe, plug-in hybrid sales fell 2.5% (392,284 units) as of July 2024, while electric car registrations increased slightly by 1.3% (712,637 units). These cars currently make up 1.4% of Spain’s automobile fleet and 3% of the EU’s.
Under a different particular action plan that is funded with 2,169 million euros and centres on five areas of action—production, consumption, waste, raw materials, and water—accelerating circular economy projects becomes crucial in this environment. Certain injections of $300 million will be available to a number of industries, including equipment, textiles, and plastics. Additionally, ICO’s advantageous credit lines have been extended, and organisations like the European Investment Bank (EIB) have already invested 11.600 million in the domestic market to fund circular economy projects between 2019 and 2023.
Biomethane also shows up as a change lever. This biogas, which has very effective plants in Germany, the UK, Denmark, and France, converts waste into energy. With fresh investments planned, such as Moeve’s €600 million plans to develop 30 factories, Spain is beginning to realise its promise.
Other options, like biomass, haven’t yet established a competitive niche. According to the U.S. Energy Information Administration, it will continue to play a minor role in the 25% renewable energy mix in 2025 and 2026. Direct CO2 capture from the atmosphere, which is expected to grow significantly among developed nations this year, will account for a large portion of the world’s first power’s decarbonisation efforts. Large corporations on the CO2 market will purchase carbon offset credits from a new facility in Texas that will remove 500,000 tonnes of carbon dioxide from the atmosphere annually by 2025. It will overtake Iceland’s Mammoth complex to become the world’s largest of its kind.
With China dominating global supply chains, the batteries of the future will also be important actors. With a 37% market share worldwide, its business, Contemporary Amperex Technology (CATL), will keep supplying big automakers like Tesla, Ford, and Volkswagen.
This is comparable to the second generation of biofuels, which are mostly being developed in Spain. With a total expenditure of 1.2 billion euros, Moeve and its partners started construction on a new 2G biofuel facility in 2024 with the goal of establishing the largest 2G biofuel industrial complex in Southern Europe. The facility, which is situated in Palos de la Frontera (Huelva)’s “La Rábida” Energy Park, will employ used cooking oils and agricultural waste as raw materials. It can produce 500,000 tonnes of renewable diesel and sustainable aviation fuel (SAF) for use in land, sea, and air transportation.
Significant socioeconomic implications result from all of this. According to a Moeve and Manpower study, renewable energy sources would boost the European GDP by 145 billion euros by 2040, and green hydrogen and biofuels will create 1.7 million employment in the EU. At 181,000, Spain has the most green molecule-related jobs in Europe and is leading the way in green hydrogen generation. More than Germany (145,000), France (105,000), and the United Kingdom (173,000). Â
