Executive summary

Spain has made impressive progress in transforming its energy system. Between 2015 and 2025, it more than doubled renewable electricity capacity to about 119 GW and improved energy intensity by 2.4% per year on average. It also reduced greenhouse gas emissions by around one-fifth between 2015 and 2024. Spain’s progress reflects an ambitious strategic and institutional framework that is anchored in the National Energy and Climate Plan, the Climate Change and Energy Transition Law, and well-defined policies to accelerate electrification, decarbonisation and climate adaptation. The social dimension is a defining feature of Spain’s energy strategy, including through the Just Transition Institute and measures designed to link investment in clean energy with jobs, regional development and social inclusion.

The energy transition is helping to improve security and competitiveness. While Spain relied on imports for almost 70% of total energy consumption in 2024, the rapid decarbonisation of the power sector is reducing this exposure. Domestically deployed renewable electricity increased from 35% of total generation in 2015 to 56% in 2025, while all low-emission sources collectively accounted for around three-quarters. By expanding the share of domestically available, low-cost, renewables, Spain reduced its vulnerability to fossil fuel price shocks and lowered wholesale electricity prices. The impact on energy security is substantial: without the renewable capacity additions deployed between 2011 and 2024, natural gas imports in 2024 would have been almost 40% higher. Over the same period, the growth of wind and solar power avoided an estimated USD 26 billion in cumulative gas import costs.

Persistent challenges remain as Spain’s transition advances. Spain has demonstrated its ability to deploy clean power at scale. The central challenge now is to turn the transition of power supply into a transformation of the economy as a whole. As in many IEA Member countries, the transport sector is a key challenge. Emissions in this sector increased by nearly 8% between 2015 and 2024. While progress is made through residential renovations, fossil fuel based heating remains widespread in the building sector. In industry, electrification, renewable heat and low-carbon fuels offer significant opportunities, but investment is hampered by high upfront costs and uncertainty over future demand and infrastructure. Across all three end-use sectors, low relative fossil fuel prices compared to those for electricity undermine the commercial case for switching.

Rebalancing energy price signals can unlock demand‑side transformation. Accelerating electrification across sectors is a top priority for Spain. At 25% of final energy consumption (in 2024), electricity's share remains well below Spain’s 2030 objective of 35%. Spain’s high penetration of renewable electricity results in relatively low wholesale spot prices for power compared to those in peer countries, but taxes, levies, and network charges keep final consumer prices high. At the same time, these cost components are much lower for fossil fuels, blunting the incentive for households, businesses and industry to choose electric solutions even when these are cleaner and more efficient. Carefully shifting the balance of taxes and levies while protecting vulnerable consumers would make electrification more attractive, improve competitiveness, and help ensure that low-cost renewable electricity generation delivers its full economic value.

As the power system transforms, stability becomes a key policy challenge. Policy makers must ensure that grid infrastructure, system operation and network planning evolve as quickly as the generation mix. Recent experience, including the April 2025 blackout, underlines the need to strengthen resilience.

Spain launched important electricity system operation reforms, including enhanced supervision, updated operating procedures and additional grid technology investments. Maintaining stable frequency, voltage and inertia in a transformed power system will depend on diligent implementation of these measures. It will also require a sustained focus on system planning and reinforced governance that continuously adapts to changing circumstances.

The growing role of variable renewables places flexibility at the centre of electricity governance. Storage is needed to absorb surplus generation and shift it to periods of higher demand. Reinforced interconnectivity would enable Spain to both improve its own security of supply and allow its surpluses to serve wider European markets. Demand‑side flexibility – including smart charging, aggregation and industrial load management – can reduce costs for consumers and the system. Spain has taken critical steps in this direction through financial support, legal recognition of storage as a system flexibility resource, and modernised grid-operation rules that better reflect the importance of storage and demand-side flexibility. This is leading to growth in flexibility resources. Additional action, including strengthening incentives for the uptake of dynamic pricing, could accelerate this progress.

Further efforts are needed to ensure a more balanced renewable energy supply mix. While stability and flexibility mechanisms are essential for the next phases of the energy transition, action on the generation side can help ease challenges too. Solar PV made up about 50% of total renewable electricity capacity and accounted for over 90% of renewable capacity additions in 2025. The speed of deployment has been impressive, but a system dominated by solar additions risks worsening curtailment, cannibalising prices and weakening investment signals. A higher share of wind power would allow Spain to integrate more renewables in its electricity system, thereby protecting the business case for their future deployment.

Complex permitting and social acceptance challenges could slow the further development of renewables, especially wind power. Addressing these barriers through continued efforts to facilitate permitting processes, ensure benefit-sharing by renewable projects with local communities, and increase stakeholder engagement will be essential for sustaining the growth of renewable electricity capacity at a pace that meets expected increases in demand.

The planned phase‑out of nuclear power between 2027 and 2035 has important implications for Spain’s security of energy supply and decarbonisation. Nuclear plants provide reliable, low‑carbon electricity and support the well-functioning operation of the power system. Managing the phase-out safely and affordably will require monitoring to ensure that renewables, flexibility and stability resources are deployed and integrated quickly enough, while also reflecting broader geopolitical and economic dynamics and related risks. Approving operators’ extension requests can provide cost-efficient transitional relief.

As in many countries, implementation capacity is now just as important as policy ambition. An integrated planning approach with regular progress reviews linked to corrective actions and strengthened co-operation across ministries, regions, local authorities, regulators and operators can help roll-out broad and ambitious energy transition policies. Administrative bottlenecks, especially in permitting and project evaluation, risk slowing delivery. Skills shortages in renewable deployment, grid integration, construction and energy efficiency could also constrain progress. Reinforced administrative resources and a major effort to scale up training and reskilling would help Spain convert its targets into investment, infrastructure and consumer benefits.

Spain’s people‑centred approach is a major asset. The country developed advanced frameworks for delivering a just transition and fighting energy poverty, supported by dedicated institutions and targeted policies. However, affordability remains an important concern for many households. The transition will better retain public support if it visibly improves living conditions, lowers exposure to fossil fuel price volatility and provides vulnerable groups with access to clean technologies, efficient homes and affordable mobility. Continued focus on targeted building renovation and energy efficiency support and inclusive clean energy technology programmes can deliver lasting social benefits.

Overall, this review finds that Spain is entering the coming years from a position of strategic strength. It has built one of the largest renewable electricity fleets among IEA Member countries, created a robust policy framework and demonstrated that its decarbonisation efforts support security, competitiveness and social inclusion. The priority should now be to convert this foundation into a fully integrated, flexible and resilient energy system. If Spain can accelerate electrification, modernise grids, unlock flexibility, manage the nuclear phase-out prudently and sustain public and businesses confidence, it can move from being a low-emissions power sector frontrunner to a model for whole-economy energy transition.