Within the framework of the Annual Meeting of the World Economic Forum (WEF) in Davos, and for the second consecutive year, the Iberian Industry and Energy Transition Initiative (IETI)—an intersectoral effort led by McKinsey & Company together with industrial leaders such as ACS, EDP, Galp, Iberdrola, Moeve, Naturgy, Repsol and Técnicas Reunidas—has presented its updated vision on the role of the Iberian Peninsula in strengthening European competitiveness through reindustrialization associated with the energy transition.
The update of the IETI Index highlights the progress made over the last year and defines five priority initiatives for the future. The conclusions and proposals were presented in a multilateral working session in which Enrico Letta (former Prime Minister of Italy and author of the Letta Report), Cristina Lobillo (Director of Energy Policy of the European Commission), institutional representatives, CEOs and presidents of IETI member companies – including ACS, EDP, Galp, Iberdrola, Moeve, Naturgy and Repsol – participated, as well as senior partners from McKinsey & Company.
Strategic autonomy and economic growth
Participants highlighted Europe’s weak industrial position in strategic sectors, lower labor productivity, regulatory and infrastructure fragmentation, and lag in innovation, in an increasingly demanding geopolitical context. In this scenario, they highlighted the role of the energy transition as a catalyst for reindustrialization and as a lever to relaunch European competitiveness, especially in countries like Spain and Portugal, which have optimal conditions to attract investments.
According to McKinsey & Company analysis, Spain and Portugal could jointly generate up to one trillion euros in added value and one million jobs between now and 2030.
The availability of low-cost renewable energy constitutes a central pillar of the European growth model for the coming decades. The energy transition is rebuilding and modernizing the continent’s energy system and, in doing so, can boost industrial development both in consolidated sectors – such as automotive, ceramics or refining – and in other emerging ones, including batteries, renewable molecules or data centers. The development of these value chains in Europe will strengthen strategic autonomy and resilience, while contributing to an economy prepared for future growth.
The IETI Index tracks 21 indicators that allow evaluating the progress of the energy transition and reindustrialization in Spain and Portugal. Although the general trend is positive and promising signs are observed, the report warns of the need to accelerate the pace to overcome industrial structural gaps and meet the established objectives. Among the main findings of the latest evaluation are:
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Encouraging signs in investmentwith a significant increase in projects after the final investment decision (post-FID), which have doubled in Spain and quintupled in Portugal. Likewise, the additions of small-scale generation and storage capacity maintain a positive trajectory, which could anticipate improvements in industrial results and strategic autonomy.
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Persistence of industrial structural gaps in both countries, well below the European reference. Critical variables such as investment in R&D (between 1.5% and 1.7% of GDP), labor productivity, regulatory quality and the weight of the industry in the economy remain stagnant and lag behind European partners and other advanced economies such as the United States. In contrast, vehicle production (2.4 million in Spain) and industrial employment (2.9 million people in Spain) show signs of recovery and are advancing in line with the objectives for 2030.
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Solid progress in energy transitionwith Spain progressing as planned and Portugal ahead of the curve. The deployment of renewables (35% of the mix in Portugal), energy prices (27% lower in Spain compared to the EU average) and the adoption of electric transport (40% of vehicle sales in Portugal) have evolved in a particularly positive way. However, the report highlights the need to strengthen incentives for investment in electrical networks and the adoption of renewable molecules.
«The latest IETI report shows strong momentum for the energy transition in Spain and Portugal, but now we need to accelerate: deploy clean energy solutions, scale demand and build cross-border infrastructure that allows Iberia’s abundant energy to be transferred to where Europe needs it most. This is what will turn the current momentum into a real competitive advantage and greater energy security for Europe,” says Maarten Wetselaar, CEO of Moeve.
IETI participants agreed that, although the opportunity is clear and progress has been made, the window for action is narrowing. Achieving results will require faster execution, deeper public-private collaboration and decisive leadership. Spain and Portugal, with their combination of energy, industrial and human capital assets, are well positioned to play a central role in building a more competitive, resilient and sustainable European future.
Aware of the urgency to accelerate the pace of developments, IETI promotes five priority initiatives to unlock Iberia’s potential and lead the energy transition and European reindustrialization as a rstrengthen ambition and coordination around competitivenesscreating and scaling industrial ecosystems in strategic growth areas—such as renewable fuels and molecules, batteries, defense, technological enablement and artificial intelligence; eitherdirect regulation to competitivenesssimplifying and stabilizing results-focused regulatory frameworks and improving the ease of doing business by removing barriers to investment, targeted incentives and an environment based on technological neutrality that reduces contextual costs.
They also bet onaccelerate infrastructure deploymentreinforcing investment in critical assets such as electrical networks, storage, transportation and logistics. At the beginning of this year, more than 70 industrial companies in Spain warned about the critical situation of electrical distribution networks, where the majority of connection requests are currently rejected. They also propose rdouble down on innovationincreasing investment in R&D andblock talent productivity.