The sun and the geographic position are a huge natural potential for Spain and offer the opportunity for the country to become an energy leader in the European Union, in investments in renewable energy sources.
About 63.7 GW of renewables are currently installed in Spain, and although the sun has huge natural potential, much of the installed capacity in renewable energy comes from wind farms, and water has a significant share. These natural potentials and the investments in their exploitation offer a solid opportunity for the investors, but also for the strengthening of the strategic positions of Spain, according to Statista. Namely, today the country imports almost 68% of the energy used in the country. Only 32% of the energy is domestically produced.
Hence, the increase in domestic capacities is significant from a political and economic aspect, and that is good news for investors. The political establishment has a great reason and motive to work on easing regulations, reducing bureaucratic procedures for obtaining permits, and improving the business climate. It is expected that they will improve continuously.
Interest in investing in renewable energy in Spain is high. The country is ranked 10th in the amount of investment in renewable sources in the world, and the amount of investment last year amounted to 11 billion dollars, Visual Capitalist reports. The total production of energy from renewable energy sources in Spain is 121 350 GWh which is 46.7% of the total production in the country. The country’s target is to generate at least 74% of total energy from renewable sources by 2030.
The natural potential, the state strategy, the solid technical capacities of the electricity network, which enable stable and safe production of energy from renewable energy sources, good connection and infrastructure for the timely supply of necessary materials and skilled labor, which Spain has, make the country a possible major player in the Union in the area of the energy transition. Spain is not lagging behind in terms of advancing new technologies and their implementation, especially in terms of energy storage. Its geographical proximity to Africa, especially to the north, offers the possibility of an energy connection which is an additional attractive fact for investment.
At present, most of the solar power plants are located in the south, in Andalusia and Extremadura areas. Spain is well on its way to becoming a leader in renewable energy if it manages to invest enough money to ensure that the targets set by the country are met. The continuous investments and the steps taken for the general improvement of the sector are a positive signal that the country is determined to make use of this opportunity to take the lead in the next decade. The possibilities for creating new investment models are analyzed to provide additional investment finance and accelerate energy investment. Although there are risks, investment projects that will yield results in the medium term continue.
The European Investment Bank, perhaps one of the most active financial institutions supporting projects to increase green energy use, has provided € 100 million to expand such facilities in Spain and Portugal. The funds are intended to accelerate the implementation of smaller projects in these countries, which in the period from 2021 to 2024 should increase the capacity of renewable energy sources for an additional 430 MW of capacity for solar and wind energy. The new facilities that will be realized through this project should provide renewable energy for over 200,000 households, and the projects will be realized in less-developed areas.
An additional effect of the realization of these investments will be the opening of over 700 new jobs. These investments, in addition to economic development, contribute in increasing the capacity of renewable energy sources, encouraging balanced development, and slowing down climate change, are really great benefits from these investments. Hence, it is important to create innovative financial models that will encourage investment in less developed areas, where the return on investment may be longer than usual.
Accelerating this process, which involves attracting fresh capital through innovative methods, is crucial for Spain and building a leadership role in the energy transition. At the same time, it is important to improve the technical performance of the distribution systems and the greater energy connection with the neighboring countries.