Órdago by Spain of the European energy giants. Attracted by the emergence of renewables, with ample land availability and one of the lowest generation costs on the Old Continent, the large companies in the sector from France, Italy, Germany or the United Kingdom have set their sights on the promising Iberian market . The recent landings of the French state giant EDF —which has focused on the Spanish decarbonization and efficiency market— and the Austrian Verbund —it has paid 1,000 million for a powerful solar and wind portfolio— are the latest examples of this trend, in which practically all the large continental firms are immersed.
No one wants to be left out of the ongoing energy revolution. Gone are the years in which renewables needed the crutch of premiums for their installation, a stage in which Spain also became a destination for another type of foreign investment, “more opportunistic and with less long-term vocation”, in the words of José Luis Moya, founder and CEO of RIC Energy, one of the pioneers in the sector. “Unlike then, the profile of those who are arriving in recent times is that of major players in the sector, and that is important. We have had four years of very, very strong inflows”, adds the director, who envisions a “historic, unique opportunity” for Spain. His is not just any voice: he knows what he is talking about, having sold several turnkey plants to large European firms in the sector who prefer not to get involved in the initial phases of the project.
Today, both wind and solar power walk on their own, with very juicy rates of return, predictable cash flows and a defined horizon: a good part of the hopes of decarbonising the Spanish economy rest on their shoulders. The official roadmap is clear: the installed capacity of wind turbines will almost double over the 2020-2030 decade, and photovoltaic will quadruple. And that in the energy sector these objectives have been considered dead paper for months. “Seeing the investor appetite and the inertia of the market, it can not only be said that they are going to fall short: it is that they are going to double,” says the head of RIC Energy. The bet of the big foreign names is added to that of Spanish giants such as Iberdrola, Acciona Energía and -to a much lesser extent- Endesa and Naturgy, which in recent months have not left renewable power to the system.
The business commitment to renewables and energy efficiency in Spain is on all fronts. But if one stands out above the rest, that is photovoltaics. This is where the British BP has entered with force in recent years, through its subsidiary Lightsource —one of the largest solar developers in Europe thanks to its powerful financial muscle—, which has established its main headquarters outside of London in Madrid and which aspires to exceed three gigabytes of photovoltaic in the coming years. “The fundamentals are very good: there is sun, land, favorable regulation and a settled PPA market [acuerdos de largo plazo de suministro de energía renovable]”, outlines its maximum responsible in Spain, Fernando Roger.
Galp, another oil company, has followed the same path as BP. With 1.2 gigabytes in operation, the Portuguese company has become one of the largest photovoltaic operators in the country. Its French counterpart Total —one of the largest companies in the eurozone— has also put the autopilot on the Peninsula, where it hopes to reach five gigabytes of solar panels in operation in 2025 and which it complements with a growing commitment to commercialization. And, although in a more modest way, another great continental name —in this case, electricity: the German RWE— is taking important steps in photovoltaics after a start more focused on wind power.
He knows in depth all the sides of the coin.
Why Spain and why now? “Spain’s competitive advantage is enormous,” summarizes Óscar Barrero, a partner at the consulting firm PwC specializing in energy issues. “There is a lot of unused land, a good wind resource and almost infinite solar capacity. And, let’s not forget, they are real, tangible assets that generate income every month.” Juan Antonio Martínez, from the ASE group, an energy consulting firm for companies, directly links the bet with the “enormous potential” of photovoltaics: “Here the number of hours of solar radiation is practically double that in Germany, and that makes that the recovery of the investment is also twice as fast”. Martínez warns, however, of a future risk: the lack of interconnections. “To become a true energy power, Spain has to be able to dispose of that electricity. The risk, if not, is that all these new projects remain isolated from the rest of Europe”, he slips by phone.
The bet, however, is not limited to the field of solar panels. In traditional wind power —on land—, European money has been flowing for years. This includes the purchase, less than a year ago, of a powerful investment portfolio of the Azora Capital fund by the Italian oil company Eni, in what is its first investment in renewables on Spanish soil. Also the acquisition by the Scottish electricity company SSE of a substantial portfolio of wind assets that belonged to Siemens Gamesa. Or that of several companies already consolidated in the Spanish renewable sector, such as Eolia or Sofos Energía, by the French Engie.
In the field of wind power, moreover, in recent months an absolutely new vector of investment has accelerated: that of floating wind power. With a complex coastal profile —both on the Cantabrian coast and in the Mediterranean— due to the great depth of the seabed a short distance from the shore, the only possible alternative is the installation of floating wind turbines. A technology still in its infancy, but in which two Nordic giants and one British giant have just announced their landing: the Danish company Ørsted —the largest electricity company in the Nordic countries and one of the largest in Europe—, which will go hand in hand with Repsol; the Norwegian oil company Equinor, which will have Naturgy as a local partner; and Shell, which will be supported by Capital Energy. The words used by Ørsted when he unveiled his plans, at the beginning of April, are a good temperature assessment of the sector’s mood: his goal is to become “the leader of floating wind power” in Spanish waters. The oil business is experiencing one of its best moments in years, but the verb diversify is conjugated in the present tense. And it has Spain as a priority destination.