The International Energy Agency (IEA) considers that Spain’s strong commitment to renewables and the rapid transformation of its energy system have strengthened the country’s supply security and competitiveness by reducing dependence on fossil fuels and lowering wholesale electricity prices. In its new report, the agency calls for accelerating electrification and proposes a set of ten measures that includes reviewing the closing schedule for nuclear power plants, boosting electric vehicles, improving interconnections, and rebalancing price signals between different energy sources.
"Spain faces the coming years from a position of strategic strength", the IEA emphasizes in its latest "Energy Policy Review", where it highlights that the country has one of the largest renewable parks among its partners and a robust framework of public policies. In the agency’s view, "the priority now should be to turn these foundations into a fully integrated, flexible and resilient energy system".
The international body argues that, if Spain manages to accelerate electrification, modernize the grids, strengthen flexibility, prudently manage the phased shutdown of nuclear plants, and preserve social and business confidence, "it will be able to move from being at the forefront in decarbonizing the electricity sector to becoming a model for the energy transition of the entire economy".
The IEA analysis highlights that the expansion of renewable energy is already helping to lower the wholesale electricity market and reduce dependence on imported fuels. It specifies that, without the strong rollout of new green capacity, purchases of natural gas for power generation would have meant an additional bill in 2024 of 26,000 million dollars (23,131 million euros).
Despite these advances, the report recalls that in 2024 electricity accounted for only 25% of final energy consumption, still far from the national target of 35% set for 2030, so that "accelerating the electrification of end uses must be a priority".
On this line, the AIE advocates electrifying the energy demand of households and industry in parallel with the growth of renewable generation, through reductions in electricity taxation that improve its competitiveness and affordability. It also calls for stepping on the accelerator in the transformation of transport, by tearing down cost barriers and deploying more infrastructure, since the penetration of the electric vehicle remains limited, especially in company fleets.
"The high capacity for renewable generation in Spain leads to relatively low wholesale prices in the 'spot' market compared with other similar countries, but taxes, levies and grid charges keep prices high for the final consumer," the AIE criticizes. It adds that these cost components are significantly lower in fossil fuels, which reduces the attractiveness of electric solutions for households, businesses and industry, even when they are cleaner and more efficient.
The organization also proposes intensifying the renovation of buildings to meet energy efficiency and electrification targets, combined with specific support for vulnerable consumers. It recalls that heating based on fossil fuels remains widespread and that industry faces high upfront investment costs to make the leap to more efficient technologies.
"Carefully adjusting the tax burden and other levies on electricity, while protecting the most vulnerable consumers, would make electrification of demand more attractive, improve the competitiveness of the economy, and enable the full benefits of low-cost renewable power generation to be harnessed," the agency says.
System security and strengthening of the grid
In the chapter on supply security, the AIE recognizes the reforms undertaken by Spain to promote storage, demand flexibility, and adaptation of grid standards to a generation mix undergoing rapid transformation. However, it warns that "the stability of the electricity grid is becoming a key challenge for energy policy" and that events such as the April 2025 blackout highlight the need to reinforce the system’s resilience.
The document argues that continuing to improve the infrastructure and management of the electricity system, along with a more balanced mix of wind, solar, and hybrid technologies, would make it possible to integrate an even greater volume of renewables and, at the same time, increase the security and robustness of supply.
The IEA proposes increasing system flexibility through an accelerated deployment of storage solutions, a more active demand response, and more interconnections with neighboring countries. In addition, it advocates strengthening network security and resilience through more solid governance among system agents, the implementation of improved operating procedures, and the adaptation of regulatory frameworks to the new needs of the electricity sector.
Nuclear schedule and reactor lifetime
Among the priority recommendations, the agency highlights the need to strengthen energy security and diversify supply. In this context, it proposes assessing "the possibility of approving the extension of the operating life of existing nuclear reactors" after the corresponding safety reviews, taking into account their role in supply security and the evaluation of the costs and benefits of their operation in the long term.
The IEA argues that nuclear energy is a low-emissions source of electricity generation that provides firm, stable capacity, and that it helps to reduce dependence on imported natural gas. It also notes that, although it is not usually the ideal technology for dynamic voltage control, it does support system stability as synchronous generation, facilitating safe and reliable operation of the grid.
The report recalls that, in 2025, the Congress of Deputies approved a motion urging the Government to reconsider the closure schedule for nuclear power plants and that the operator of the Almaraz plant formally requested a three-year extension, until 2030, which was authorized by the Executive. The request was justified by uncertainty in international energy markets and the need to reduce consumers’ exposure to price volatility.
"Spain should build on this precedent and continue developing a transparent assessment framework that serves as a basis for adopting approval decisions on a case-by-case basis," recommends the AIE, which insists that such decisions must be supported by safety criteria, suitability from the point of view of energy security, and cost-benefit analysis for both consumers and for the electricity system as a whole.
The agency adds that the structure of taxes and levies that fall on nuclear energy must be configured so that the economic framework simultaneously recognizes this technology's contribution to the energy system and the costs associated with its externalities, such as waste management and the tasks of dismantling the installations.