Spain, the world’s second-largest economy in corporate energy purchase agreements

With a noticeable amount 4.67 GW in signed agreements In 2023, the country will hold 28% of the European share of these contracts, second only to Germany. Spain achieved these results despite the economic and infrastructural challenges facing the sector, as noted in the latest edition of the report. EY Research on Renewable Energy Country Attractiveness (RECAI).

Despite limitations in its electricity grid infrastructure, market volatility and emissions that have seen Spain ranked twelfth in terms of attractiveness for renewable energy investment, the country continues to stand out as a privileged location for clean energy investments. This investment interest reflects confidence in Spain’s energy potential and its strong commitment to the transition to more sustainable energy sources.

Faced with a scenario of historically low prices in the wholesale electricity market, Spain is moving to innovative solutions which are strengthening their energy sector and overcoming current challenges. This low-cost environment, which is characteristic of countries such as Bulgaria and Greece, represents an opportunity for the Spanish market to stand out by adapting and strengthening its energy strategy.

Likewise, grid congestion in Spain has highlighted the need optimize energy infrastructure, which represents an opportunity to reassess and improve the efficiency of the system. This situation is encouraging investors to consider new locations such as the north of Spain, where, despite less sunshine, less congestion creates a more favorable environment for the development of renewable energy projects, thereby paving the way for the diversification and sustainability of the country’s economy. energy sector.

In accordance with Agustin Rico, partner responsible for the energy sector at EY Spain: “Spain is in an energy transition where sustainability and innovation are more important than ever. By focusing on creative solutions and adaptive energy policies, the country is well positioned to overcome current obstacles and pave the way to a greener and more sustainable energy future.”

At the global level the situation is similar. Despite increased investment in clean energy, which reached $1.8 trillion last year. $660 billion allocated for renewable energyinvestment still falls short of targets proposed at COP28 to triple renewable energy capacity by 2030. Grid stagnation and high capital costs threaten to delay progress just when acceleration is most needed, according to the latest EY report.

Mature markets

In this issue of RECAI USA takes first place in the ranking, followed by China and Germany, are attractive to investors due to the constant demand for renewable energy sources and the solidity of their projects. France and Australia, for their part, round out the top 5, standing out for their commitment to sustainable development.

The UK and India occupy sixth and seventh positions respectively, while Denmark climbed to eighth place, followed by Canada, Japan and the Netherlands, just above Spain (12th place).

Changes in the global PPA market

In 2023, PPAs reached a record 46 GW worldwide, establishing unprecedented year for the sector. However, activity is expected to slow down in 2024. Companies that delayed contracts due to price uncertainty are now finding more stable ground for negotiations.

In this sense, Antonio Hernandezpartner responsible for regulated sectors, economic analysis and sustainability at EY Consulting, noted that “the recent evolution of the PPA market indicates the maturity of the sector, where price stabilization and the restoration of bargaining power from buyers signal more stable balance and greater predictability of the renewable energy future.”