Spain builds industrial base for energy transition

Spain is preparing a new support programme aimed at expanding domestic production of equipment and components for renewable energy and storage. The initiative aims to strengthen Spain’s industry while reducing Europe’s dependence on imported equipment.

Spain’s Ministry for Ecological Transition has launched a public consultation on the programme, which will provide financial support to manufacturers of batteries, electricity grid equipment, heat pumps, wind power components, renewable hydrogen production technologies and solar photovoltaic equipment. RenewablesNow reported.

Funding will be drawn from the European Regional Development Fund (ERDF) for the 2021–2027 period. The programme will be managed by Spain’s Institute for the Diversification and Saving of Energy (IDAE), with financial support allocated through competitive tenders. The initiative follows the previous RENOVAL support programme, which has already provided EUR 458 million to 73 projects focused on manufacturing equipment and components needed for the energy transition. The new programme aims to further expand this industrial capacity.

Spain already holds a relatively strong position in several supply chains for these technologies. According to the ministry, domestic manufacturers are currently capable of producing more than 60 % of the components required across the entire photovoltaic value chain and almost 100 % of the components needed for wind power. Spain is also a net exporter of these technologies.

Greater security of supply and investment

However, the government wants to address remaining supply-chain dependencies, particularly for components that Spain and the European Union continue to source from third countries. Increasing domestic production could improve security of supply while supporting investment, employment and industrial competitiveness. The emphasis on domestic manufacturing also reflects European efforts to build a stronger domestic clean technology sector. As countries accelerate the deployment of renewable energy and electrification, demand for batteries, grid infrastructure, solar equipment, wind turbines and other technologies is expected to increase significantly.

For Spain, strengthening domestic manufacturing could enable the country to capture a greater share of the economic value generated by its rapidly growing renewable energy sector. It could also help Spanish manufacturers compete in growing international markets for clean energy technologies.

The consultation on the programme’s regulatory framework will run until 25 September. Once the consultation ends, the government is expected to set the final framework and launch the competitive funding allocation process.