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What Spain's Draft Climate Law means for Renewables?

Recently, the Government of Spain has approved the draft climate law. Inclusive of a myriad of other objectives, it seeks to achieve zero emissions by 2050. This ambitious piece of legislation must now be passed by Parliament.

The bill has considerable support within elements of the Spanish government, and if passed, will result in the cessation of all fossil fuel subsidy support. Moreover, it would similarly result in no new coal, oil or gas extraction works being commissioned in Spain.

This endeavor is a step by Spain towards honoring its commitment to the objectives of the Paris Accord as well as those set by the European Commission towards Europe becoming carbon neutral by 2050.

So what does this mean for the Spanish renewable industry in the short to medium term? The 2030 target will become for the electricity sector to secure 70% from renewable energy. This will be coupled with energy efficiency measures reducing consumption by at least 35% over the same period. 

This is projected to generate in excess of €200 Billion worth of investment within the decade. And spur the generation of over 300,000 new jobs annually. It is furthermore projected that such investment will boost the country's GDP by up to 1.8% over the next decade.

The proposed legislation is also taking into account the widespread economic and social disruption resulting from the Covid19 pandemic. It is the writer's humble submission that this move will act as a substantial stimulus to the Spanish renewable sector, which will enjoy tremendous growth and unprecedented government support over the ensuing decade.

By Gareth Foulkes-Jones

 

 

Gareth Foulkes-Jones's picture

Thank Gareth for the Post!

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Discussions

Matt Chester's picture
Matt Chester on May 29, 2020 9:21 pm GMT

Thanks for sharing, Gareth. How does this measure compare with other European nations who have put forth climate legislation-- is it more aggressive, on par, or a bit less ambitious?

Gareth Foulkes-Jones's picture
Gareth Foulkes-Jones on Jun 1, 2020 7:56 pm GMT

Hi Matt

That's a very good question. Thank you very much for it!

In truth, alot of Europe is starting to do a really awesome job on renewable and sustainability investment. Naturally, Germany is always a top performer. Given that they have the deepest pockets and have alot of renewable focused industry that directly benefits from such spending. 

France and the Netherlands are also doing an excellent job. Also, I was consulting with a client just this morning that focuses exclusively on markets such as the Czech Republic and Hungary. There also seems to be alot of untapped value in often overlooked markets such as these.

However, the added dimension of substantial unemployment in nations such as Italy and Spain have placed tremendous pressure on their governments to seek out solutions for rapid job creation. Both Spain and Italy have also just been granted large loans by the EU to help bail their economies out. A condition of this is that atleast 25% of the almost Euro 300 billion they have been granted must be spent on renewable and sustainable infrastructure.

So in summary. I submit that whilst there are many great markets in Europe at the moment. Spain, Italy and I would may Portugal are becoming particulary "hot".

Many thanks!

Gareth

Matt Chester's picture
Matt Chester on Jun 1, 2020 9:02 pm GMT

A condition of this is that atleast 25% of the almost Euro 300 billion they have been granted must be spent on renewable and sustainable infrastructure

I'm hoping to see some sort of funding strings like this come in at the U.S.-- a lot of talk, but I want to see this type of action in practice!

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