Spain and Portugal have everything to become the “stack” of Europe. The Peninsula’s position to become the new engine of reindustrialization is “privileged” and its infrastructure can reverse the continent’s loss of competitiveness, while advancing its transition towards a more sustainable energy model. That is the main conclusion of the analysis presented by the alliance of Spanish-Portuguese multinationals that form Iberdrola, Moeve, BBVA, Repsol, Naturgy, Santander and EDP, in addition to some senior partners from McKinsey & Company.
Called the Iberian Industry and Energy Transition Initiative (IETI), the coalition presented its report at the largest political and business summit on the planet: the World Economic Forum (WEF), which has been held since Monday in the Swiss town of Davos, and which ends today. The objective of the IETI is clear: to convert Iberia into the focus of continental expansion of competitive renewable energy sources, taking advantage of our strategic advantages.
The main one is that we have cheaper renewable energy, between 20% and 25% lower than its price in Central European countries. In addition, we have a wide availability of renewable natural resources (more sun, sea and wind), competitive energy costs and advanced infrastructure. The McKinsey & Company report also detects “broad areas for green generation projects” and “a robust electricity grid that can adapt to new demands.”
Likewise, the “efficient refining system of the region” and its “strategic location” (waiting for large gas pipelines to be built that connect us with France and Germany), opens opportunities for the production of biofuels and hydrogen-based fuels. In fact, one of the key points is green hydrogen, whose production in Spain and Portugal is between 10% and 20% cheaper than in Central Europe. This not only strengthens the competitiveness of local industries, but also contributes to the European goal of achieving carbon neutrality by 2050.
Companies involved in the IETI, such as Moeve (formerly Cepsa), are leading significant efforts to promote the energy transition. Moeve, which on Monday joined the First Movers Coalition (FMC) of the Davos Forum – a strategic alliance to accelerate the energy transition in the world – has made ambitious commitments such as reducing its scope 1 and 2 emissions by 55% to 2030 and allocate more than 60% of its investments to sustainable projects.
“Being part of global initiatives like the FMC allows us to accelerate the development of innovative energy solutions for sectors that are difficult to decarbonize (such as heavy transport, maritime, aviation and the steel industry),” explained Maarten Wetselaar, CEO of Moeve, during signing for admission. According to Børge Brende, president of the WEF, the company will contribute its expertise in technologies such as renewable hydrogen and advanced biofuels. Moeve will also deploy an ultra-fast electric charging network on the Peninsula.
Challenges and future proposals
For the energy transition to be effective, the IETI proposes concrete measures such as reducing administrative burdens, streamlining permits for green projects and establishing clear and stable regulatory frameworks. These actions would be key to attracting investments and ensuring that sustainable solutions compete on equal terms with those based on fossil fuels.
Implementing McKinsey’s plan to turn Spain and Portugal into “strategic hubs of critical industries” could increase the GDP of both countries by 15%, create up to one million jobs and increase exports by 20%. But the report emphasizes that the success of this transition would not only benefit Spain and Portugal, but would also contribute to revitalizing European competitiveness, at a time marked by challenges such as the “wave of deindustrialization and loss of competitiveness, aggravated by the lack of investment.” in R&D and high energy prices.
During the presentation, Wetselaar stressed that “we have a unique opportunity to boost employment and GDP in Iberia while improving Europe’s energy security and achieving climate goals.” Ignacio Sánchez Galán, president of Iberdrola, pointed out that “Europe must improve its resources (wind, sun and water), which generate stable prices and significantly reduce imports.” Finally, Onur Genç, CEO of BBVA, said that “we must focus on policies that provide clear demand signals and incentives for transformation at scale.”