5. Investment in the Energy Transition in Spain

As part of its energy transition framework, Spain has set ambitious targets to increase the share of renewable energies in electricity production. Meeting them requires substantial investment. Although the context of public investment until the pandemic was unfavourable, Next Generation EU has changed the situation with a significant increase in funds for the energy transition. The PERTE, a valuable instrument in developing a new active industrial policy, is an important innovation in applying these funds. Spain has a relative advantage in its capacity to produce energy from renewable sources, which is already translating into lower prices than the European average. It can use this advantage to improve competitiveness and promote a reindustrialization process, attracting industrial projects that choose to set up in Spain because of the access to cheap and stable energy. The main question, however, is whether this investment effort will be sustained once these funds are no longer received, especially in a context marked by the return of fiscal rules and pressure to increase security spending.