A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) outlines the need for Red Eléctrica de España (REE) to address increasing pressures linked to the integration of renewable energy into Spain’s power grid. Spain aims to produce 81% of its electricity from renewable sources by 2030, placing the transmission system operator at the centre of the national energy transition with implications for neighbouring countries and the wider European market.
The report notes that REE’s forthcoming strategic plan for 2026-2030 will be critical for closing the investment gap, easing grid congestion and improving cost efficiency. Congestion remains a challenge as renewable generation expands faster than transmission capacity in several regions, highlighting the need for accelerated investment in grid reinforcement, energy storage, interconnections and digitalisation. The authors point out that strengthening the grid will also support emerging sectors such as green hydrogen.
As the EU progresses with plans to modernise and decarbonise electricity networks, the report suggests that REE’s new strategy could serve as a model for transmission system operators across Europe. The analysis emphasises the importance of aligning business planning, asset management and financial strategy with broader climate and energy objectives, supported by a robust and future-proof transmission network. Greater interconnection capacity is viewed as essential for Spain’s contribution to European energy affordability and security.
The authors recommend that REE adopt the European Green Bond Standard and consider debt instruments tied to performance indicators such as renewable capacity enabled, emissions avoided and system flexibility. These measures would widen access to funding and reinforce transparency. Although REE has maintained a strong investment-grade profile under its current plan, the report highlights a significant investment gap that will require increased capital expenditure from 2026 onwards.
According to the analysis, REE’s ability to deliver planned investments effectively and transparently will be central to safeguarding both system reliability and Spain’s renewable energy trajectory. Failure to address the investment shortfall could prolong congestion issues, slow renewable deployment and undermine the credibility of national decarbonisation targets.
