Three Spanish projects strengthen Europe’s energy autonomy with solar and wind capacity and transmission networks
Jaime Celaya had always wanted to work in the renewable energy market, because of its impact on society. So, following his studies and some early professional experience, he joined Iberdrola, the largest energy company in Europe by market capitalization and a leader in renewables. In his role as a business developer, he evaluates, selects, and implements new energy projects that will help Iberdrola reach its goal of zero emissions by 2040.
Jaime Celaya
“It is a very dynamic and active sector, with new technologies, new mechanisms, new techniques appearing day-to-day,” he says. “Every day, I learn something new and acquire more knowledge.”
In the coming years, Celaya will be working on Iberdrola’s ambitious plan to build an extensive network of 19 solar photovoltaic power plants and three onshore wind farms across Spain, Portugal and Germany. "We have an abundance of sunlight, water, and wind, which are the essential components for renewable energy production,” he says. “Investing in these resources and renewables is crucial for countries to reduce their greenhouse gas emissions.”
With nearly 2.2 gigawatts capacity, the new installations will have the potential to generate up to 4 terawatt-hours of electricity. This is equal to the average annual energy consumption of more than 1 million households. 70% of the plants will be located in rural areas affected by the industrial transition to net zero, and regions where the per capita income is lower than the EU average.
“We offer training to people in these regions, giving them the knowledge and skills to operate, build, and work in solar power plants and wind farms,” Celaya says. “The new projects will foster growth and employment in these areas, making it possible for them to develop more projects.”
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Ensure a stable supply of energy
Incorporating renewable energy into our grids is difficult because they don’t generate electricity consistently. Unlike fossil fuel or hydro power plants that generate electricity on demand, solar panels and wind turbines rely on weather conditions and location. This means they produce varying and partially predictable amounts of electricity, making it hard for our energy grids to maintain a stable and consistent supply. This is the so-called renewable integration challenge.
To tackle this issue, some of Iberdrola’s photovoltaic projects will include hybridisation with a battery system — combining two different sources, like wind and solar, with energy storage to ensure a more stable and reliable power supply.
"With hybrid systems, we construct photovoltaic plants near a wind farm,” says Celaya. “When there's no sunlight, we can generate power with the wind. Also, when there's no wind, we can generate power from the sun. This way, we use the same infrastructure and avoid the need for additional construction. Using batteries, we can save extra energy from the wind and sun and put it on the market when there’s no wind or sun or when they’re not generating making power.”
The power plants are expected to come into operation by the end of 2028.
The European Investment Bank is providing a €1 billion loan to Iberdrola to co-finance the construction of the 22 renewable energy plants in Spain, Portugal and Germany, in a deal signed in June 2023. Called a “framework loan,” it can finance a range of projects.
“This type of financing offers stability, flexibility, and long-term funding for multi-project renewable energy operations,” says Luis Cañete, a senior loan officer who worked on the deal at the European Investment Bank.
The operation is part of the EU bank’s financing package in support of REPowerEU, a European Commission plan developed in response to Russia’s invasion of Ukraine that aims to reduce EU dependence on fossil-fuel imports and accelerate the green transition.
An innovative way to finance energy projects
Red Eléctrica de España, S.A. is another company that will contribute to Spain’s energy transition. It plans to expand and reinforce its transmission network, which transports electricity from power plants to homes, businesses, and industries. These investments are part of Spain and Red Eléctrica’s Transmission Network Development Plan 2021-2026 which aims to:
- integrate future renewable generation facilities, enabling Spain to reach its 74% renewable electricity target by 2030
- improve the reliability of the 220 and 66 kilovolt networks
- reinforce the interconnections with Portugal and France
- improve the cost-efficiency and reliability of supply in the Spanish power system, including in the Balearic and Canary Islands
The European Investment Bank will support Red Eléctrica by acquiring green senior bonds and green hybrid bonds worth €500 million issued by the company under the Red Eléctrica Green Finance Framework. In January 2023, the Bank acquired €41.5 million of the inaugural green hybrid bonds. This transaction, under the InvestEU programme, was the first public transaction under the Bank’s green bond purchase programme.
“Green bonds and green hybrid bonds can fill the climate funding gap, while promoting the use of capital markets,” says Raquel Cuervo Salvador, a bond financing officer at the European Investment Bank who is working in the newly established Bond Financing Desk. “They provide numerous benefits to renewable energy projects, including expanding the investor base, reducing execution risk, increasing funding availability, and our stamp of approval and signalling effect.”
The project is expected to help reduce greenhouse gas emissions and create employment opportunities in less-developed regions of Spain.
A new burst renewable of energy for Spain
Solar power plants will play a crucial role in the energy transition. They capture the abundant energy from the sun to generate electricity without emitting greenhouse gases, which is essential to reducing our reliance on fossil fuels.
Backed by the InvestEU programme, the European Investment Bank is providing a framework loan of up to €1.7 billion to Solaria to support the construction of 120 solar photovoltaic power plants in Spain, Italy, and Portugal, in a deal signed in September 2023.
This operation comes under InvestEU’s Sustainable Infrastructure policy window and it will support the achievement of the EU’s policy objectives under the European Green Deal.
Founded in 2002, the Spanish company aims for 5.6 gigawatts of capacity in full operation, which would amount to 9.3 terawatt hours a year. This is equal to the energy use of nearly 2.5 million households. This clean energy will reduce greenhouse gas emissions by three million tonnes of CO2 a year.
“Developing a 5.6 gigawatts pipeline of renewables across Spain, Italy and Portugal will impact these countries and the European Union’s effort to tackle climate change, while increasing energy security,” says Elena Cuadros, a renewable energy engineer at the European Investment Bank. “With more than one third of the solar farms in less-developed regions, the project will also boost employment where it is most needed.”
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