Ghosts from the past threaten a renewed slowdown in renewable energy. Solar and wind projects in Spain are under scrutiny as the first executives of major utilities warn that the pace of investment could slacken if a government plan moves too slowly. The Integrated National Energy and Climate Plan, PNIEC, aims to produce 81% of electricity from renewables within seven years, a target many industry leaders say is ambitious. Renewable associations share the concern, but they also insist the plan can succeed if it is implemented promptly.
Executives from Endesa, Iberdrola, and Naturgy challenge the feasibility of such rapid expansion. Jose Bogas, chief executive of Endesa, questions the reliability of the numbers when considering historical data and technical hurdles in integrating new capacity in a short timeframe. He notes that growth must align with demand, and to date, energy consumption patterns have not shifted in tandem with the ramping up of wind and solar capacity. The shift away from combustion-based vehicles toward electric cars, the adoption of heat pumps, and the decarbonization of industry remain uneven, which affects how much electricity is actually needed. This misalignment fuels a familiar industry fear: if demand does not rise, new renewables may struggle to find buyers, complicating financing and project viability. Ignacio Sánchez Galán, president of Iberdrola, echoed the same worry.
Diagnosis
The central issue hinges on timing: 2025 is the pivotal year. Around 50 gigawatts of projects are in the pipeline, expected to be installed within two years, while PNIEC envisions a substantial increase in renewable capacity and a forecasted demand rise to about 267,000 gigawatt hours in that period. However, a 2022 savings plan trimmed electricity demand, and in the rolling year to 2023 it fell to roughly 243,000 GWh due to competitiveness pressures and the growth of self-consumption. In practical terms, much of the new generation risks facing a softer market, making lenders cautious about financing the construction of new parks. The wind industry, represented by the Spanish wind energy association AEE, urges the government to extend the 2025 deadline. “There are many generational inertia issues with administrative milestones that must be met”, says John Virgilio, general manager of AEE. If building permits arrive in January and project owners decide whether to proceed, banks will evaluate the asset against supply and demand scenarios; if the balance is off, financing becomes harder to secure.
Virgilio also notes that the concentration of projects can create material shortages and spark social opposition, which could raise costs and threaten previously viable plans. Recent licensing delays illustrate the risk of stalled progress that could derail whole portions of the program.
Difficulties
Demand, supply, and rising social opposition are only part of the challenge. Naturgy’s president, Francisco Reynés, confirmed a strategic tilt toward wind over solar through 2025. Falling solar prices—near zero at times during the central hours of the day—complicate the visibility of solar investment returns and depreciation. He emphasizes the need for solutions like storage to fully utilize generated energy; without storage, the market mechanism must adapt to ensure a reasonable return on assets and to support sustained investment. Industry sources also point out that energy dumps happen when supply outpaces demand, including weekends and holidays, underscoring the importance of a more flexible market design.
The rapid expansion in installed capacity, from roughly 4 GW in 2017 to over 20 GW by 2023 and now a target exceeding 1,000 GW in the PNIEC update, requires a robust grid. Transmission and distribution networks must be upgraded to prevent losses and grid congestion. As in a crowded road, more lanes are needed to prevent cars from veering off the main route. This analogy captures the need for a more dynamic and expansive electrical grid to accommodate peak generation without waste.
Resort
Not everyone sees the same obstacle as an insurmountable wall. The director-general of UNEF, Jose Donoso, argues that the problem is not investing itself but ensuring investments happen. He proposes several steps: extend renewables deadlines beyond 2025, accelerate storage deployment, and introduce more organized price signals. He advocates tender schemes that guarantee income for new renewable capacity, such as a Contracts for Difference framework, so new generation can count on stable returns even when electricity prices dip. Donoso also calls for greater electrification to boost demand and for a shift in planning philosophy toward a dynamic, region-spread approach to grid development. He stresses that climate urgency and the economic opportunity of energy transition demand decisive action and clear milestones to keep momentum intact.
In summary, the energy transition in Spain hinges on aligning demand growth with the rapid expansion of renewables, modernizing the grid, and designing market incentives that attract capital while protecting consumers. The path forward involves policy flexibility, robust storage solutions, and a willingness to adapt planning processes to a fast-changing energy landscape. This alignment is essential to prevent supply from overwhelming demand and to ensure that the 2025 and post-2025 targets reflect both economic realities and environmental commitments.