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Spain 2021 Energy Policy Review INTERNATIONAL ENERGY AGENCY

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Spain 2021 Energy Policy Review INTERNATIONAL ENERGY AGENCY Spain 2021 Energy Policy Review INTERNATIONAL ENERGY AGENCY The IEA examines the IEA member IEA association full spectrum countries: countries: of energy issues including oil, gas and Australia Brazil coal supply and Austria China demand, renewable Belgium India energy technologies, Canada Indonesia electricity markets, Czech Republic Morocco energy efficiency, Denmark Singapore access to energy, Estonia South Africa demand side Finland Thailand management and France much more. Through Germany its work, the IEA Greece advocates policies Hungary that will enhance the reliability, affordability Ireland and sustainability of Italy energy in its Japan 30 member countries, Korea 8 association Luxembourg countries and beyond. Mexico Netherlands New Zealand Norway Poland Portugal Please note that this Slovak Republic publication is subject to Spain specific restrictions that limit Sweden its use and distribution. The terms and conditions are Switzerland available online at Turkey www.iea.org/t&c/ United Kingdom United States This publication and any The European map included herein are without prejudice to the Commission also status of or sovereignty over participates in the any territory, to the work of the IEA delimitation of international frontiers and boundaries and to the name of any territory, city or area. Source: IEA. All rights reserved. International Energy Agency Website: www.iea.org Foreword The International Energy Agency (IEA) has conducted in-depth peer reviews of its member countries’ energy policies since 1976. This process supports energy policy development and encourages the exchange of and learning from international best practices. By seeing what has worked – or not – in the “real world”, these reviews help to identify policies that deliver concrete results. Since 2017, the IEA has modernised the reviews by focusing on the key challenges in today’s rapidly changing energy markets. FOREWORD Spain has shown important leadership on clean energy transitions, including through support for key IEA initiatives. I am especially grateful to Teresa Ribera – Fourth Vice President of the Spanish Government and Minister for the Ecological Transition and the Demographic Challenge – for her longstanding dedication to action on climate change and ensuring fair and equitable energy transitions. She has played an invaluable role in the Global Commission for Urgent Action on Energy Efficiency and the Global Commission on People- Centred Clean Energy Transitions, two high-level groups of leading international figures that I convened in recent years to bring greater attention and policy action in these critical areas. Since the last IEA review in 2015, Spain has solved a long-standing problem of electricity and gas tariffs not covering costs, and has closed all of its coal mines, allowing it to prioritise the energy transition in its policy agenda. Spain has emphasised the concept of a just transition by ensuring that communities in traditional energy sectors, notably coal mining, are not left behind. The Spanish framework for energy and climate is based on a 2050 objective of national climate neutrality and 97% renewable energy in the total energy mix. As such, it is centred on the massive development of renewable energy, energy efficiency, electrification and renewable hydrogen. Notwithstanding its considerable progress to date on decarbonising and increasing the share of renewables in the electricity sector, Spain’s total energy mix is still heavily dominated by fossil fuels. The transport, industry and buildings sectors all have considerable work ahead of them to meet the country’s targets for increasing the share of renewables and reducing emissions. When all of Spain’s plans and strategies are implemented, a completely different energy sector will emerge, where fossil fuels are no longer dominant and end-user sectors are mostly electrified. Such a transformation will bring new challenges in the form of energy security, as fluctuating renewable generation will require new forms of back-up and flexibility. The changes will also bring opportunities, particularly in areas such as energy system integration. Importantly, Spain’s plans to recover from the COVID-19-induced economic crisis present a major opportunity to frontload its planned investments in its clean energy transition over the upcoming three years. I sincerely hope that the recommendations proposed in this report will help Spain navigate its energy system transformation as it seeks to build momentum towards achieving climate neutrality and a renewables-based energy system by 2050. Dr. Fatih Birol Executive Director International Energy Agency reserved. 3 rights All TABLE OF CONTENTS ENERGY INSIGHTS 1. Executive summary .....................................................................................................11 Overview ............................................................................................................................11 Climate change policies.....................................................................................................12 Energy efficiency ...............................................................................................................13 Electricity transition ............................................................................................................13 Energy system transformation ...........................................................................................14 Energy security ..................................................................................................................14 Key recommendations .......................................................................................................15 2. General energy policy .................................................................................................17 TABLE OF CONTENTS OF TABLE Country overview ...............................................................................................................17 Supply and demand ...........................................................................................................19 Institutions ..........................................................................................................................23 General energy policy overview ........................................................................................25 Energy security ..................................................................................................................30 Pricing and taxation ...........................................................................................................31 Assessment .......................................................................................................................32 Recommendations .............................................................................................................37 ENERGY SYSTEM TRANSFORMATION 3. Energy and climate change ........................................................................................39 Overview ............................................................................................................................39 Energy-related CO2 emissions ..........................................................................................40 Carbon intensity .................................................................................................................42 Institutional responsibilities ................................................................................................43 Emission targets and strategy ...........................................................................................44 Adaptation to climate change ............................................................................................49 Assessment .......................................................................................................................50 Recommendations .............................................................................................................52 4. Energy efficiency .........................................................................................................55 Energy intensity .................................................................................................................55 Energy consumption by sector ..........................................................................................57 Institutional responsibilities ................................................................................................61 reserved. 5 rights All TABLE OF CONTENTS Energy efficiency targets and strategies ...........................................................................61 Assessment .......................................................................................................................72 Recommendations .............................................................................................................75 5. Renewable energy .......................................................................................................77 Renewable energy in total final energy consumption .......................................................77 Renewable energy in electricity .........................................................................................80 Institutional responsibilities ................................................................................................81 Renewable energy policy
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