ELECTRIFICATION IN SPAIN

Electrification in Spain: driving the sustainable future with renewable energy

Electrification consists of replacing fossil energy sources such as coal or gas with electricity generated from renewable energy sources such as wind or solar. This shift towards cleaner energy is key in the fight against climate change and affects all industries.

To reduce dependence on fossil fuels and move towards a more sustainable energy matrix, the European Union has set the goal of achieving carbon neutrality by 2050. To do so, the focus must be on decarbonising industry, using clean and renewable energies and increasing the number of vehicles, products and services that run on electricity.

Electrification and its relationship to Spain's renewables and the energy market

In Spain, electrification is becoming increasingly important as part of efforts to reduce greenhouse gas emissions and move towards a more sustainable economy.

The country has great potential in renewable energies, as one of the leaders in Europe in terms of installed wind and solar energy capacity. So much so that by 2023, 25.1% of the energy consumed in Spain was from renewables, situating it ahead of other European industries such as Italy, Germany and France's, as well as the European Union average. This figure was double the percentage recorded 15 years ago.

According to the International Energy Agency (IEA), the levelised cost of generating electricity from solar and wind technologies has decreased over the last decade, significantly lower than the costs of conventional fossil fuels. That's not all: according to a report published by the Spanish Association of Electricity Companies (Aelec), it has been proven that electricity is the only industry capable of achieving the necessary mass integration of renewable energies into the system. By 2030, 74% of electricity is expected to be produced by renewable energies and 80% of electricity generation is expected to be emissions-free.

For all these reasons, the electrification of final consumption, especially through power from renewable sources, has been established as the most effective strategy to carry out the energy transition.

Electrification against climate change in Spain

According to Aelec's report 'Electrification, the key to combating climate change' (Spanish version), electrification is the most efficient and effective way to ‘combat climate change’ and immediately reduce ‘greenhouse gas emissions’. With this change in consumption processes, it would be possible to reduce the carbon footprint we generate as a society and achieve the commitment to be emissions-neutral by 2050.

Currently, one of the main challenges we face as a society is to combat climate change. At Iberdrola España, we know that electrification is essential to move towards a more sustainable future with zero emissions.

Benefits of electrification

The benefits of electrification in Spain span different industries and directly affect our planet and society as a whole. Some of the benefits of electrification include that it:

Reduces greenhouse gas emissions. The use of electricity generated from renewable sources emits less greenhouse gases than fossil fuels. This cleaner and more sustainable option is crucial in sectors such as transport and industry, which are major emitters of greenhouse gases globally.
Improves air quality. Fossil fuels are not only the main culprit of climate change, they also generate particulate matter that is harmful to human health, causing millions of premature deaths annually worldwide. According to the UN, nearly the entire world's population (99%) breathes air that exceeds the quality limits set by the WHO. Electrification helps improve air quality by reducing dependence on fossil fuels for air conditioning in homes and transport, among others.
Creates new jobs. The transition to renewable energy can also create new jobs. According to the National Integrated Energy and Climate Plan (PNIEC) 2021–2030, investment in renewable energy is estimated to create 107 k to 135 k jobs by 2030. In addition, the change of energy model could create approximately 120 k additional indirect jobs a year.
Increases energy efficiency. Electrification can lead to significant energy savings due to increased efficiency in areas such as households, transport, construction and industry. Electric motors, for instance, are generally more efficient than internal combustion engines, which means that more useful energy can be obtained from the same amount of energy invested. This means energy resources are used more efficiently.
Produces savings for consumers. By diversifying the source of power, the economy becomes less vulnerable to fluctuations in oil prices. In addition, renewables are often the cheapest options in terms of available electricity supply.
Drives innovation and digitalisation. Fostering electrification drives research and development of clean energy technologies, such as high-performance batteries, energy storage systems and smart grids. It also involves the integration of advanced systems and the digitisation of services.

Household electrification

Home electrification makes households more energy efficient, resulting in lower electricity bills. The following are notable domestic electrification solutions: aerothermal technology, up to three times more efficient than boilers; photovoltaic systems, which can reduce electricity bills by up to 25%; and smart meters.

Electrification enables centralised control of household appliances, smart thermostats and LED bulbs. This turns homes into more efficient spaces. At Iberdrola España, we have different services to guarantee home electrification and sustainable consumption, with the possibility of installing your own solar panels or having your community do so.

Electrification of industry

Electrification in industry involves using electricity instead of fossil fuels in processes such as manufacturing, food, mining and chemical production. This kind of electrical equipment and machinery is more efficient. It may also involve the development of heating and cooling technologies and implementing energy management systems to optimise consumption.

At Iberdrola España we have promoted initiatives in this regard, such as our PERSEO start-up programme, to find solutions that facilitate electrification, including in agriculture and livestock.

Electrification of rural areas

Electrification in rural areas, which account for 16% of the population and occupy 84% of the land in Spain, is crucial to improve quality of life and promote sustainable development there. The Rural Decarbonisation Observatory, prepared in collaboration with Deloitte, highlights difficulties such as the energy gap in consumption and electrification, the limited amount of information on the rural environment, or the lack of infrastructure, which contribute to discrimination based on region.

One of the main barriers to electric vehicle (EV) adoption in these areas is the lack of charging points: only 31% of the inhabitants of these regions have public charger close by, making it difficult for residents to opt for EVs as a cleaner and cheaper alternative. The lack of EV charging infrastructure in rural areas limits electric mobility and may perpetuate dependence on fossil fuels. This not only affects the environment, but also deprives rural communities of the economic and environmental benefits of EVs.

Iberdrola España's commitment to electrification

At Iberdrola España we support the energy transition towards a cleaner and more sustainable economy. To do so, we are committed to increasing electrification. Such is the commitment of the Iberdrola Group, of which Iberdrola España forms part, to a more sustainable and environmentally safe model that will invest €41 B and hire 10 k people by 2026 to accelerate electrification. We focus on three main areas:

Improve electricity grids to connect electricity demand
Generate more clean energy to replace fossil fuels
Increase energy storage to guarantee the stability of the electricity system.

‘Innovation is one of the faces of sustainability and the energy industry is crucial in decarbonisation through the economy's electrification'.

Mario Ruiz-Tagle

CEO of Iberdrola España

We are also driving electrification specifically in sectors such as transport, through the adoption of electric vehicles, and buildings, with the use of aerothermal energy, several of which contribute to the reduction of greenhouse gas emissions.

In the case of transport, the Iberdrola Group is committed to electrification through its Smart Mobility Plan. This plan envisages the deployment of around 60 k charging points for electric vehicles by 2030 and an investment of €1 B in the Iberian Peninsula.

With regard to buildings, the Iberdrola Group has set the objective of reducing short-term costs in both heat pumps and thermal storage. In addition, it seeks to increase efficiency by reaching temperatures above 150º in heat pumps and 500º in industrial heat technologies.