Spain’s electricity grid operator, Red Eléctrica de España (REE), faces a critical juncture in supporting the country’s renewable energy goals, according to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).
The IEEFA analysis highlights Spain’s target to generate 81% of its electricity from renewable sources by 2030, placing REE at the center of the nation’s energy transition with broader implications for Europe.
According to the report, grid congestion remains a major obstacle, as renewable generation growth frequently outpaces transmission capacity in multiple regions. “This underscores the urgency for REE to accelerate investments in grid strengthening and to lead on enabling green hydrogen development and digitalisation,” said Kevin Leung, sustainable finance analyst at IEEFA.
The report emphasizes that REE’s 2026–2030 strategic plan will be pivotal in bridging the investment gap, easing congestion, improving cost efficiency, and aligning with EU efforts to modernize and decarbonize power grids. “Spain offers a critical case study of how a TSO should align business strategy, asset split, investment planning, and financial management with broader climate and energy goals,” added Jonathan Bruegel, European power sector analyst at IEEFA.
Key recommendations include scaling up capital expenditure in energy storage, interconnections, and digitalisation, while leveraging green financing to expand access to funding. The report also suggests adopting the European Green Bond Standard and performance-linked debt instruments to enhance transparency, accountability, and investor confidence.
Leung noted, “Despite REE’s solid investment-grade profile under its 2021–2025 plan, a material investment gap remains. Investment will need to rise significantly to meet future system needs and address shortfalls from the previous planning period.”
Failure to close this gap, the report warns, could perpetuate congestion, slow renewable capacity growth, and increase financial and reputational risks, undermining Spain’s decarbonisation pathway.
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