Distributed energy market in Spain

• Complex regulations: Navigating Spain's regulatory environment can be challenging due to complex and evolving policies related to energy and grid modernization. Canadian companies must stay updated on local regulations and compliance requirements.
• Economic dynamics: The high upfront costs associated with deploying smart grid technologies can be a significant barrier. Companies need to balance these costs with the long-term benefits of enhanced grid flexibility and efficiency.
• Established players: Spain's energy market is dominated by major players like:
  • Endesa
  • Iberdrola
  • Naturgy
  • EDP

There are also well-established local companies covering most of the value chain for energy-related project development. Canadian companies must offer innovative solutions that complement the market offerings. They often must also rely on partners to access buyers. There could be opportunities to target smaller, more regional utilities instead of the biggest players.

Spain's energy system is divided into:

• The peninsular system, which covers the mainland and is interconnected with neighboring countries.
• Non-peninsular systems, which serve the Balearic and Canary Islands, as well as Ceuta and Melilla.

Spain strongly focuses on integrating renewable energy sources (particularly solar and wind power) into its grid. In 2024, renewable energy sources accounted for 56% of Spain's electricity mix. 

Spain is investing in modernizing its grid through digitalization, smart grid technologies, and enhanced connectivity to ensure reliability and efficiency in energy distribution. 

Red Eléctrica de España (REE), the operator of Spain's electricity transmission system, is actively involved in several initiatives to modernize the grid and enhance its resilience and efficiency. REE is undertaking projects to expand and reinforce the transmission network. This will help accommodate the growing share of renewable energy and ensure reliable electricity supply, including:

• the construction of new transmission lines
• upgrading existing infrastructure
• enhancing interconnections with neighboring countries

• Iberdrola, in collaboration with the European Investment Bank (EIB), has secured a €500 million loan to expand smart electricity grids across 12 autonomous communities in Spain. This project aims to enhance the integration of renewable energies, improve grid reliability, and support economic growth and job creation.
• Solaria has received approval for two new data center projects totaling 130 MW in Madrid. These projects are part of Solaria's broader strategy to expand its energy portfolio and integrate renewable energy sources. These data centers will support integrating renewable energy into the grid, enhancing grid stability and efficiency.
• ENLIT (18-20 November, Bilbao, Spain) is an annual conference and exhibition in the power and energy sector that focuses on energy transition and grid transformation. It is well attended by European utilities and has a summit and a trade show. 

Spain's energy market is rapidly transitioning towards renewable energy, with significant investments in solar, wind, and smart grid technologies.  This shift presents Canadian businesses with opportunities to provide advanced energy solutions (such as smart grid technologies and energy storage systems) to support Spain's sustainable energy goals. Canadian companies should be well prepared for a very competitive market and rely on innovative technologies and partnerships with local companies to navigate the complexities of the market. 

The growing trade relationship between Canada and Spain, supported by the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), facilitates easier market entry and collaboration for Canadian companies. This makes Spain an advantageous market compared to non-EU countries. Canadian companies can also benefit access to the European R&D finance program, from the recent status of Canada as an associated country to Horizon Europe. For more information on cleantech & infrastructure in Spain market please contact : mdridcommerce@international.gc.ca.