DNV’s first energy transition report focused on Spain highlights the critical need to accelerate efforts to meet the country’s climate neutrality targets by 2050.

The report reveals that, while Spain is on track to reduce CO₂ emissions by 74% compared to 1990 levels by mid-century, this pace falls behind the ambitious milestones outlined in the National Energy and Climate Plan (NECP).

Spain has already made impressive strides, reducing greenhouse gas emissions by nearly 27% between 2005 and 2019, well above the EU’s average reduction of 19%.

The ambitious strategy for 2050 aims for a carbon-neutral, sustainable, and climate-resilient nation.

In 2020, Spain underscored this commitment by declaring a climate emergency and establishing thirty priority actions to address climate change.

“Spain has made remarkable progress in emission reductions and renewable energy leadership,” said Santiago Blanco, Executive Vice President and Regional Director for Southern Europe, Energy Systems at DNV.

“However, achieving the net-zero goal requires an immediate expansion of renewable energy deployment and improvements in infrastructure.”

Renewables to Quadruple

DNV projects that Spain’s installed renewable capacity will quadruple by 2050, with solar capacity rising to 230 GW and wind power to 120 GW, positioning Spain as a European solar leader.

This increase will not only boost energy security but also reduce electricity production costs by 10% below the European average for solar energy and 15% for onshore wind energy by mid-century.

On the other hand, fossil fuels, which currently account for 70% of the energy mix, are expected to fall below 30% by 2050.

However, Spain’s short-term targets remain challenging. The NECP goal of a 32% reduction in greenhouse gas emissions by 2030 currently exceeds projected progress, with DNV forecasting a 13% reduction by that date.

Infrastructure Bottlenecks

Despite Spain’s competitive renewable energy costs, which are already below the European average, immediate infrastructure limitations could hinder progress.

The share of electricity in energy is expected to increase only modestly from the current 22% to 26% by 2030, below the NECP’s 35% target, before reaching 50% by 2050, driven by electric vehicles, buildings, and industry.

However, bottlenecks in permitting and limited interconnections threaten this shift.

Simplified regulatory frameworks and increased grid capacity are needed, especially as electric vehicle adoption and electrification in buildings and industry grow.

“Besides more renewable installations, Spain also needs to expand its grid and interconnections with the European backbone. This is crucial for both export capacity and better grid management,” Blanco said.

Current interconnections with Portugal are working adequately, but narrow routes to France and Germany limit Spain’s export potential and require the development of new electricity and gas networks, such as Bilbao-Bordeaux and Barcelona-Marseille.

Hydrogen and Cross-Border Collaboration for Long-Term Success

From the 2030s onward, hydrogen will become a key component of Spain’s industrial energy strategy, with exports to Europe expected to reach 1.7 Mt by mid-century.

DNV’s report highlights Spain’s low-cost renewable resources as key to achieving competitive hydrogen production, provided there is significant investment in infrastructure.

“Hydrogen has the potential to change the game in Spain’s energy mix, but it will take time and significant investments in renewable energy,” said Santiago Blanco. “Its wider adoption is likely to take at least a decade.”

The Path Ahead: Economic and Strategic Potential

DNV’s outlook underscores Spain’s significant economic growth potential, including hydrogen, and shows that strengthening infrastructure and interconnections will enhance the country’s role in the European energy landscape.

However, as the country gradually moves away from nuclear energy, it may face a prolonged short-term dependence on natural gas for grid stability until the early 2030s.

Blanco concluded, “Spain’s long-term success requires not only changes in infrastructure and policies but also the understanding and support of society for the energy transition. A clear and sustainable plan will help us face the challenges ahead.

The path to full climate neutrality by 2050 requires urgent action, but Spain can achieve its goals and lead the way in Europe by accelerating renewable energy deployment, improving electrification, and expanding infrastructure.

With 160 years of global experience and 25 years in the Spanish energy market with over 300 local experts, DNV remains committed to collaborating with all stakeholders to drive the energy transition.”