Iberian Electricity Sector: A transition towards a more liberalized and sustainable market

In recent years, important policy developments have impacted the electricity market in the European Union (EU), affecting the cost of energy and resulting in changes to countries’ electricity generation mix. This paper details the Spanish and Portuguese attempts to transition to a cleaner energy economy. At the end of the last century, Iberian countries started the process of liberalizing their electricity market and promoting the use of renewable energies in the electricity mix. Their objectives included establishing a “greener” energy supply, opening new employment opportunities, reducing dependence on imported fossil fuels, and pursuing a more sustainable economy and society. Assuming a leading role in the energy transition process has been a novel and challenging endeavor for both countries. The economic crisis only increased those challenges, leading to mixed results. In addition to covering the evolution of the Iberian electricity sector, this paper identifies key considerations for the future. Acknowledgements The authors would like to thank Ramon Bueno and Jonathan Harris for commenting on earlier drafts and providing valuable edits to this paper, as well as Paula Angel and Erin Coutts for the translation and formatting of the working paper. Funding for this project was provided by the Junta de Extremadura through a 2016-2017 travel grant for teachers and researchers. 1 Global Development and Environment Institute, Tufts University and University of Extremadura (Spain) Email: [email protected] 2 University of A Coruna (Spain) 3 University of Oviedo (Spain) Photo: Javier Joló Recio GDAE Working Paper 17-01: Iberian Electricity Sector