Spain is in a strategic position within the global energy transition but faces significant challenges in advancing toward a sustainable system. Aurora Energy Research, in dialogue with Energía Estratégica España, outlines medium and long-term expectations, identifying key points for each renewable technology and the associated challenges.

1. Offshore Wind: A Sector with Great Potential

Offshore wind energy will be one of the key players in Spain’s future energy landscape. The government has approved the Maritime Spatial Planning (POEM), allocating 5,000 km² to priority zones for this technology, with an estimated total capacity of 15,000 MW. These areas, distributed among the North Atlantic, Levantine-Balearic, South Atlantic, Strait-Alboran, and Canary regions, will be essential for the sector’s expansion.

According to Aurora, “Starting from 2025, a significant increase in investment in offshore projects, including floating technology, is expected. However, the lack of experience in this technology in Spain and the need for adequate infrastructure pose critical challenges.”

The creation of regulatory frameworks and the development of specialized ports will be essential to seize this opportunity.

2. Energy Storage: An Ambitious Yet Uncertain Goal

Energy storage is another central element in Aurora’s forecast. Although the Spanish government has set a target of 12.5 GW of storage capacity by 2030, the consultancy estimates that only 5 GW will be achieved, indicating a significant gap.

This shortfall would limit the ability to manage renewable production peaks, exacerbating issues like grid congestion and curtailment.

The lack of clear incentives and the high dependency on still expensive technologies, such as large-scale batteries, slow down sector progress. It will be crucial to encourage investments in thermal storage systems and batteries to ensure the stability of the energy system.

3. Nuclear Energy: A Transition Toward Its Withdrawal

The nuclear landscape in Spain will undergo radical changes in the next decade. By 2029, 5 GWh per year of nuclear capacity will be retired in Cáceres, and in Tarragona, capacity will decrease from 3 GW to 2 GW, representing a loss of 24.6 TWh of production.

In 2023, nuclear energy represented 18% of Spain’s energy mix, but this percentage will decrease dramatically with the planned closures.

Aurora emphasizes that this transition “could significantly reshape the flow of the electrical grid and increase dependence on renewable sources.” Additionally, changes in European Commission policies could influence nuclear energy development, reopening debates about its role in the energy mix.

4. Green Hydrogen: Ambition Versus Market Realities

Spain aims to lead in green hydrogen in Europe, with a target of installing 12 GW of electrolyzer capacity by 2030, surpassing countries like Germany and the United Kingdom. However, Aurora believes only 2.5 GW will be achieved, with a production cost estimated at 4.7 €/kg, raising doubts about the technology’s competitiveness in the short term.

Industry experts tell Energía Estratégica España that 2023 marked the peak of expectations for this gas, but during 2024, investments significantly declined, with important setbacks like the green steel project by ArcelorMittal announced on November 27th.

They also point out that a recovery will occur around 2026 when the most advanced pilot projects begin production.

Green hydrogen will be crucial for decarbonizing industrial sectors and heavy transport, but faces significant barriers, such as the lack of specific infrastructure and the need for subsidies to reduce initial costs.

5. Global Renewable Growth: An Unstoppable Trend

Aurora forecasts that Spain’s total installed renewable energy capacity will increase by 224% between 2024 and 2060. By 2030, renewable generation is expected to reach 84%, with over 100 GW of installed capacity. Solar energy will continue to lead the deployment, while offshore wind will gain momentum starting in 2040.

In the long term, by 2060, renewable generation will reach 95%, consolidating Spain as a key player in the global energy transition. However, the dependence on subsidies and mechanisms like PPAs will remain a crucial factor in ensuring the viability of projects.

Cross-cutting Challenges

Lastly, Aurora highlights external factors that could impact projections. The Spanish regulatory environment, including the extraordinary profits tax, generates uncertainty among investors.

Additionally, tensions with local communities, such as project suspensions in Galicia, could be replicated in other regions, further complicating the planning of new developments.

“One of the biggest challenges is the lack of capacity in the electrical grid to absorb excess renewable generation, increasingly threatening curtailment, which affects 42 of Spain’s 47 provinces, with Badajoz being the most impacted, at 20% of the total,” the firm explains, adding that the energy oversupply and the country’s limited level of industrialization intensify price cannibalization, affecting the profitability of solar projects, whose market tariffs often fall below sustainable levels.