Spain

Key facts

Spain produces 287 914 GWh [1]

Spain exports 3.6% of its electricity production

Spain is 24% electrified.

  • The fundamental challenge governing electricity in Portugal and Spain stems from their unique geographic and market profile, commonly referred to as the Iberian Electricity Island [2]
  • The Iberian Peninsula is isolated from the rest of Continental Europe by the Pyrenees. Its cross-border interconnection capacity ratio with France remains well below 4%, far short of the European Union’s target of 10-15% for member states.
  • Because Portugal and Spain built a unified wholesale market – the Iberian Electricity Market (Mercado Ibérico de Energia Elétrica, or MIBEL) – electricity flows seamlessly between the two countries via robust cross-border lines. However, the joint peninsula cannot easily export excess renewable generation or import emergency balancing power from the broader European grid
  • The Spanish electricity to gas price ratio is 2.2 for industry and 2.6 for households. [3]

 

The Spanish electricity mix is split between
  • Wind
  • Nuclear
  • Solar PV
  • Hydropower
  • Natural Gas
  • Oil
  • Other

Current state of electrification

Residential buildings in Spain

Buildings

  • The residential sector consumes 33% of the Spanish electricity consumption [4]
  • The commercial and public sector consumes 33% of the Spanish electricity consumption [5]
  • Spain has an estimated 1.3-1.5 million installed heat pumps. [6]

Industry

  • The industrial sector consumes 30% of the Spanish electricity consumption [7]
  • The most electricity intensive sectors are: [8]
    • Chemical and petrochemical industry: 15 to 17 TWh | 20% to 23% of industrial electricity
    • Basic metals and steel production: 12 to 14 TWh | 16% to 19% of industrial electricity
    • Non-metallic mineral products (cement, glass, and ceramics): 10 to 12 TWh | 13% to 16% of industrial electricity
Transport — from the design

Transport

  • The transport sector consumes 1.9% of the Spanish electricity consumption [9]
  • The numbers for the total number of vehicles on Spanish roads comes from the Spanish General Direction of Transport [10]
  • The electric fleet is composed of: [11]
  • 308 879 cars (+76 486 year on year) — this represents 1.15% of the ~26.8 million passenger cars on Spanish roads
  • 39 120 light commercial vehicles (+ 4 435 year on year) — this represents roughly 0.92% of the ~4.24 million light commercial vehicles on Spanish roads
  • 2 322 buses (+228 year on year) — this represents roughly 3.87% of the ~60 000 buses and coaches on Spanish roads
  • 1 234 trucks (+267 year on year) — this represents roughly 0.20% of the ~620 000 heavy industrial and commercial trucks on Spanish roads
  • 120 520 light vehicles (+ 4 000 year on year) — this represents roughly 2.23% of the ~5.4 million motorcycles, mopeds, and light vehicles under 4 wheels on Spanish roads

Grid and flexibility

Transmission & Distribution

While Spain installed a record amount of solar and wind generation, its transmission network suffers from localised congestion, leading to historic levels of renewable curtailment, and limited cross-border export capacity, as cross-border interconnections with France remain far below EU targets. [12]
This has created massive connection queues on both sides of the balance sheet: on the generation side, over 129 GW of wind and solar projects hold access permits while awaiting final commissioning or grid integration, while on the demand side, major industrial electrification projects, data centers, and EV infrastructure face heavy backlogs, with distribution operators rejecting over 50% of grid access requests due to saturated nodes.
To resolve these constraints, Spain is rolling out a €13.6 billion grid expansion plan through 2030, while the regulator (CNMC) and grid operator Red Eléctrica have begun releasing monthly node-by-node capacity maps and proposing flexible-demand access permits to allow large consumers to connect under dynamic operational parameters. [13] [14] [15]

Storage

Spain’s total installed electricity storage capacity currently ranges between 3.4 GW and 8.8 GW, dominated almost entirely by 3.3 GW to 5.8 GW of pumped hydro storage (depending on whether mixed reversible dams are included) and nearly 1.0 GW of thermal storage attached to concentrated solar power (CSP) plants. [16] [17]
While utility-scale battery energy storage systems (BESS) represent a small fraction of the current mix at roughly 100 MW, the market is expanding rapidly behind EU-backed schemes like the BORALMAC program and NextGenerationEU funding.
To mitigate grid congestion and integrate rising renewable generation, Spain’s updated National Energy and Climate Plan (PNIEC) targets 22.5 GW of total energy storage capacity by 2030 – comprising 9.5 GW of pumped hydro, 9.0 GW of batteries, 3.0 GW of solar thermal, and 1.0 GW of distributed storage. [18] [19]

Smart meters

Spain has installed approximately 28 million to 29 million smart electricity meters, achieving an overall penetration rate of nearly 100% across its low-voltage residential and commercial consumer base. [20]

Support schemes

Residential & Commercial Self-Consumption
NextGenerationEU / IDAE Regional Calls [21]

Rooftop Solar Photovoltaic (PV) & Battery Energy Storage Systems (BESS)

  • Solar PV: €300–€600/kWp installed.
  • Battery Storage: €140–€490/kWh.
  • Commercial/SMEs: 15%–45% of eligible project cost.
Heating & Thermal Electrification
Programa de Rehab. Energética / IDAE [22]

Air-to-Water (Aerothermal), Ground-Source (Geothermal) Heat Pumps & Hydraulic Upgrades

  • Aerothermal: ~€500/kW (capped at €3,000–€4,000/dwelling).
  • Geothermal: €1,350–€2,250/kW (up to €13,500/project).
  • Radiators/Underfloor: +€100–€200/kW extra cap.
Electric Mobility & Infrastructure
Auto Plus Plan (replaces MOVES III) & MOVES Corredores [23]

Electric Vehicles (BEVs), Commercial EVs, Private & Public Charging Stations

  • Passenger BEVs: €4,500–€7,000 (with scrapping allowance).
  • Commercial Vans: Up to €9,000.
  • Charging Points: 70%–80% for residential wallboxes; 30%–60% for public fast chargers.
Industrial Decarbonization & Large Power Users
PERTE Decarbonización Industrial & Electri-Intensive Levy Aid [24]

High-temp heat pumps (>100 kWth), Electric Arc Furnaces, Green Hydrogen, Levy Reductions

  • PERTE: Direct grants & soft loans covering 30%–50% of investment.
  • Energy-Intensive Users: Reductions on electricity levies & energy efficiency contributions.
Energy Efficiency Market Obligations
Certificados de Ahorro Energético (CAEs) [25]

Certified Energy Savings from fossil-to-electric replacements, waste heat, efficiency upgrades

  • Direct cash monetization per verified kWh saved (offered by obligated energy suppliers on top of direct grants).
Tax Relief & Local Municipal Rebates
National Income Tax (IRPF) & Local Property Taxes (IBI / ICIO) [26]

Building energy retrofits, solar PV, and heat pump installations

  • IRPF: 20%–60% tax deduction for certified 7% heating reduction or 30% primary energy savings.
  • IBI (Property Tax): Up to 50% discount for 3–5 years
  • ICIO (Construction Tax): Up to 95% reduction.

Targets

Economy wide

  • Economy-Wide Electrification Rate: Increase the share of electricity in final energy consumption to 35% by 2030 (driving a 34% increase in total power demand relative to 2019 levels). [27]

Buildings

  • Reach 73% renewable energy consumption in final heating and cooling demand across residential and tertiary buildings by 2030.
  • 19 GW of installed solar PV capacity dedicated to self-consumption on residential, commercial, and public buildings.
  • Massive scale-up of heat pumps (air-to-water and geothermal) to phase out domestic oil and natural gas heating boilers.
  • Deployment of efficient urban district energy networks fueled by biomass, geothermal, and waste heat.

Transport

  • Drive low-to-medium temperature process electrification (industrial heat pumps, electric furnaces, and heat recovery systems), contributing to an increase in Spain’s economy-wide electrification rate to 35%

Industry

  • Drive low-to-medium temperature process electrification (industrial heat pumps, electric furnaces, and heat recovery systems), contributing to an increase in Spain’s economy-wide electrification rate to 35%

Gaps and Challenges

Cross-border isolation & grid congestion: Spain’s “Iberian Island” dynamic leaves cross-border interconnections with France under 4%, preventing excess renewable exports. Transmission and distribution capacity cannot keep pace with generation, causing rising curtailment, connection backlogs, and rejections for over 50% of industrial, data center, and EV grid access requests.

Battery storage gap: Large-scale flexibility depends almost entirely on pumped hydro, with utility-scale battery storage sitting at just ~100 MW, creating a massive shortfall relative to the 22.5 GW total storage target by 2030. Physical network constraints also prevent full utilisation of Spain’s near-universal smart meter network.

Building thermal transition: While electricity dominates building energy use, heating remains heavily reliant on legacy gas systems. Reaching 2030 renewable heating and rooftop solar targets requires overcoming high upfront costs to accelerate heat pump integration.

Transport electrification lag: Transport accounts for under 2% of total electricity consumption. Scaling the electric fleet toward the 5.5 million vehicle target by 2030 is severely constrained by slow public charging rollouts and local distribution grid limits.

Industrial CapEx & infrastructure barriers: Reaching the 35% national electrification goal and scaling green hydrogen requires massive capital expenditure to replace fossil process heat with high-temperature electrical equipment, alongside securing high-voltage grid connections.

Assessment

Buildings

On track

Supported by near 100% smart meter coverage, 1.3–1.5M installed heat pumps, and active NextGenEU/IRPF incentives targeting 19 GW rooftop PV and 73% renewable heating/cooling.

Transport

Lacking

Electricity makes up only 1.9% of transport demand. Expanding the current ~472k EV fleet to the 5.5 million 2030 target faces heavy distribution connection backlogs and charger deployment lags.

Industry

On track

Multi-billion PERTE Decarbonización grants and CAE market certificates provide strong backstops for process heat electrification and 12 GW green hydrogen targets.

Power system

On track

Highly low-carbon generation profile. Renewable expansion provides a solid low-emissions base for direct electrification.

Grids

At risk

Geographic isolation (<4% interconnection with France), historic curtailment, and >50% rejection rates for demand connection requests make bottlenecks the primary risk to all 2030 targets.

Policy framework

On track

Comprehensive regulatory framework led by the updated PNIEC (35% electrification target), PERTE funding, MOVES schemes, dynamic grid permits, and a €13.6B national grid plan through 2030.

  1. 1IEA, “Country profile: Spain”, accessible here.
  2. 2Euroconsumers, “Keeping the lights on: why the Iberian blackout demands urgent grid modernisation”, accessible here.
  3. 3European Commission, “Electrification Action Plan”, accessible here.
  4. 4IEA, “Country profile: Spain”, accessible here.
  5. 5IEA, “Country profile: Spain”, accessible here.
  6. 6JRC, “Spain: status of the heat pump market”, accessible here. EHPA, “2025 European heat pump market report”, accessible here.
  7. 7IEA, “Country profile: Spain”, accessible here.
  8. 8ESIOS red electrica, “System Indicator Portal”, accessible here.
  9. 9IEA, “Country profile: Spain”, accessible here.
  10. 10DGT, “DGT en cifras”, accessible here.
  11. 11European Commission, “Alternative Fuels Observatory: Spain”, accessible here.
  12. 12Corinex, “Spain trails Europe in grid reform as blackout exposes risks”, accessible here.
  13. 13Endesa, “Grid saturation in Spain: how does it impact our daily lives?”, accessible here.
  14. 14Red Electrica, “Red electrica publishes demand access capacities for the transmission grid’, accessible here.
  15. 15Osborne Clarke, “Spain’s flexible electricity demand access permits”, accessible here.
  16. 16Energy Storage News, “Spain and Portugal back 3.5 GW of new pumped hydro energy storage capacity”, accessible here.
  17. 17IEA, “Estrategia de Almacenamiento Energético”, accesible here.
  18. 18Hydropower & Dam, “Spain allocates €90 million to support new pumped storage capacity”, accessible here.
  19. 19European Commission, “NECP Spain”, accessible here.
  20. 20DNV, “Smart meter roll out in Spain”, accessible here.
  21. 21Instituto para la Diversificación y Ahorro de la Energía (IDAE) & Ministerio para la Transición Ecológica y el Reto Demográfico (MITECO), "Programa de incentivos para la ejecución de instalaciones de autoconsumo y almacenamiento", accessible here here
  22. 22Instituto para la Diversificación y Ahorro de la Energía (IDAE) & MITECO, "Programa de Rehabilitación Energética de Edificios (PREE 5000 / PREE)", accessible here here
  23. 23Instituto para la Diversificación y Ahorro de la Energía (IDAE) & MITECO, "Programa MOVES de incentivos a la movilidad eficiente y sostenible", accessible here here
  24. 24Ministerio de Industria y Turismo & MITECO, "PERTE de Decarbonización Industrial", accessible here here
  25. 25Sistema de Certificados de Ahorro Energético (CAE) & MITECO, "Mecanismo de Certificados de Ahorro Energético", accessible here here
  26. 26Agencia Tributaria (AEAT) & MITECO, "Deducciones en IRPF por obras de mejora de la eficiencia energética en viviendas", accessible here here
  27. 27European Commission, “NECP Spain”, accessible here.