IEA commends Spain for improvements in energy policy, but urges a stronger push towards a low-carbon economy

“Spain has significantly improved its energy policy over the past few years,” said Nobuo Tanaka, Executive Director of the International Energy Agency (IEA), today in Madrid at the launch of Energy Policies of IEA Countries – Spain 2009 Review. He highlighted that the country has set a strong example of how to diversify natural gas sources through LNG development. “Together with Portugal, Spain has established the common Iberian electricity market, MIBEL, and is ambitiously developing it further. It has also become prominent in developing wind and solar energy technology, and succeeded in integrating large amounts of variable power in the electricity grid,“ Mr. Tanaka said.

Step up efforts to meet climate and energy security goals
Spain has set, along with other IEA member countries, ambitious climate and energy security targets. “Achieving these will require a transition to a low-carbon economy, a revolution in how we produce and consume energy,” Mr. Tanaka stressed. The country will need to substantially increase its efforts to reduce CO2 emissions, particularly in transport but also in the critical power sector. As fossil fuels still provide more than half of electricity, Spain will need to keep open all the options – including nuclear and renewables – for making its power sector less carbon-intensive.

The country should also increase its efforts to limit peak electricity demand through energy efficiency. “Investing in energy efficiency and clean energy should also continue to be part of the government’s possible future economic stimulus,” Mr. Tanaka added. Continue to eliminate electricity tariffs and coal subsidies The IEA report commends the substantial de-regulation of Spain’s electricity and gas tariffs. It also applauds the new financial plan to end the large deficit that had built up under the previous tariff regime. However, there is still room for progress. For example, prices for many small electricity users are still regulated and low enough to potentially distort the market. In addition, “the still-remaining subsidies for domestic coal production should be eliminated and replaced by direct social policy measures,” said Mr. Tanaka.