Article
Investment in the electricity network: a driver for growth and the energy transition in Spain
Spain’s energy future is at a decisive moment. The transition towards a decarbonised economy, industrial competitiveness and improved service for citizens all require an electricity distribution network that not only meets today’s needs but is also ready for tomorrow’s challenges.
Spain’s electricity network enters a new investment cycle
The rising demand for connection to Spain’s electricity network is already a reality. Since 2020, distribution companies have approved access to the network for a total of 43 GW of capacity, including 12 GW for data centres, 11 GW for the industrial sector, 6 GW for residential projects and more than 5 GW for hydrogen production facilities and road transport electrification.
The number of connection requests has increased tenfold in the past three years, placing significant pressure on the network’s capacity, which at present can only serve 10% of the requests it receives. According to the connection capacity maps recently published by distribution companies at the initiative of the National Commission for Markets and Competition (CNMC), 85% of available nodes are already exhausted.
Why investment in the electricity network is key to competitiveness and growth
The lack of capacity to meet rising electricity demand may slow down the development of strategic sectors such as new housing construction and the rollout of advanced technologies, including artificial intelligence, which require extensive and reliable network connections.
To prevent these projects and associated job creation from coming to a standstill, it is essential to invest in electricity networks and continue the reduction of CO₂ emissions, an ambition Iberdrola España is firmly committed to.
The recent announcement by the government’s vice-president and minister for the ecological transition and the demographic challenge, Sara Aagesen, proposing a 62% increase in the annual investment limit for electricity networks for the 2026-2030 period, is welcome news for Iberdrola España.
Regulatory challenges and the need for a stable framework to drive network investment
For new infrastructure to be operational within planned timelines, it is essential that the transmission system plan currently under discussion allows for suitable connection to the electricity distribution network. It will also be important to streamline project approval and permitting processes. Excessive administrative slowdowns are a challenge across most EU countries and one the European Commission is addressing through a forthcoming “networks regulatory package”.
It is also crucial that the CNMC establish an appropriate regulatory framework that makes the ambitions of the Spanish government and European institutions achievable. The CNMC’s regulatory proposal represents a methodological shift from the previous framework. In this regard, Iberdrola España highlights the importance of a regulatory model grounded in dialogue with stakeholders, that properly reflects the risks distribution companies must assume and that is sufficiently attractive to encourage the necessary investments.
Such a model has already been successfully implemented in other countries, where regulators have promoted network development through attractive returns and predictable, stable frameworks.
Smart networks and digitalisation: towards a more efficient electricity system
We must therefore urgently invest in new electricity connection capacity to prevent investment and job creation from being halted and to continue reducing CO₂ emissions. Insufficient electricity capacity cannot be allowed to delay new housing construction, already one of the greatest challenges facing society. Nor can Spain fall behind in the digital revolution driven by artificial intelligence, which depends on extensive and reliable network infrastructure.
Iberdrola España’s vision for investment in the electricity network
At Iberdrola España we stress that rising electricity demand, which is already evident, will generate the revenue required to finance the expansion and renewal of the electricity network without the need to increase tariffs. Higher investment in networks stimulates demand and strengthens the sustainability of the electricity system.
Spain, within the EU context, has a clear and ambitious goal of delivering on the National Energy and Climate Plan submitted by the government to Brussels, a plan that has been recognised by European authorities. At this moment of enormous and exciting opportunity, it is up to all of us – consumers, electricity companies, authorities and regulators – to ensure that this future becomes a reality.
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