eco TV Week

Spain: renewable energies offer new opportunities

6/19/2020

While Spain’s recovery plan will begin to take shape over the summer, investment in the renewable energy sector could provide significant support for economic growth and employment creation in the coming years.

Guillaume DERRIEN

TRANSCRIPT // Spain: renewable energies offer new opportunities : June 2020

As the Covid-19 epidemic continues to recede in Spain and Europe, Prime Minister Pedro Sanchez is now trying to unite political parties around a recovery plan; this recovery plan, which is still at an early stage, should focus on the development of so-called green technologies in many sectors, as well as on the strengthening of vocational training. This plan should also propose new taxations on financial or digital transactions. It will without any doubt be closely aligned with the European Green Deal, which promotes a growth model that reconciles environment, employment and the reduction of inequalities in Europe. Spain should be one of the major beneficiaries of the European reconstruction fund unveiled in May and will therefore have to put in place a public investment plan in line with Brussels' ambitions.

For sure the Covid-19 epidemic has hit the Spanish economy hard. The number of job seekers has jumped by almost 804,000 since the beginning of the crisis in March. This is an unprecedented increase well above the figures seen during the 2008 financial crisis and European sovereign debt crisis in 2011.

However, Spain can in the long run be one of the biggest beneficiaries of this acceleration towards renewable energies. Spain became last year the first European market for onshore wind, and especially for solar energy. The Spanish government presented an Energy and Climate Plan at the end of May, which would ban any new project based on fossil fuels and would target 100% of the electricity produced to be renewable by 2050.

This plan is an environmental issue but matters also for employment. According to the government, this plan would create around 300,000 jobs by 2030. A point highlighted by the president of Iberdrola, one of the largest electricity suppliers in Spain and in the world, who recalled during the summit in Madrid that “for every job generated in the electricity sector, 12 are created in other sectors. The spillover effects are therefore very significant in this sector.

The Covid-19 crisis will nevertheless drastically reduce the budgetary margins of the government of Pedro Sanchez. The Bank of Spain estimates in its June forecast that the public deficit would reach between 9 and 11% of GDP by the end of this year, which would lead to an increase in public debt between 114 and 119% of GDP.

Despite this, the opening decade offers new prospects for growth and jobs that the government will have to seize in order to sustainably restore its economy. Prime Minister Pedro Sanchez walks therefore more than ever on a tightrope.

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