Lisbon, July 21, 2025 (Lusa) - Portugal and Spain are well-positioned to lead the energy transition; they can play a central role in the future European green hydrogen market, but they must overcome crucial challenges, such as developing interconnections with the rest of Europe.
This is one of the conclusions of the study “After the Energy Crisis: Researchers Gonzalo Escribano, Ignacio Urbasos, Ana Fontoura Gouveia, former Secretary of State for Energy, and João Fachada, former technical expert in her office, prepared “Policy Responses in the Iberian Peninsula”, a result of a partnership between the Francisco Manuel dos Santos Foundation (FFMS) and the US Brookings Institution.
"Portugal and Spain are well-positioned to lead the energy transition and seize new opportunities for green industrialisation, thanks to abundant renewable resources, technical capacity and robust institutions," the study points out.
The authors emphasise that the two Iberian Peninsula countries have set ambitious targets in their National Energy and Climate Plans for 2030 (PNEC/PNIEC), focusing on electrification, green hydrogen and strengthening electricity and hydrogen interconnections with the rest of Europe.
However, they highlight crucial challenges, such as the need for more interconnections with the rest of the European Union (EU), bureaucratic hurdles in licensing processes, limitations in the electricity grid, and the need to involve local communities more in sharing the benefits of energy projects.
According to the authors, strengthening electricity and hydrogen interconnections between the Peninsula and the rest of Europe “is now a geopolitical and climate priority, and industrial and social policies that ensure a fair, competitive and inclusive transition must accompany it”.
They also highlighted the strengthening of cross-border interconnections as “an urgent need following the blackout that affected the Iberian Peninsula in April this year”.
The study concluded that Portugal and Spain have growing installed capacity for solar, wind and hydro energy and “can play a central role in the future European green hydrogen market”.
In addition, their liquefied natural gas (LNG) infrastructure “is strategic for the diversification of energy imports, particularly natural gas from the US and Nigeria, while companies expect to phase out long-term contracts with Russia by 2027”.
The study also notes that the Portuguese and Spanish “show strong support for the energy transition, seeing it as an economic opportunity” and, therefore, “we should leverage this political capital to accelerate the implementation of projects and policies that promote inclusive decarbonisation, taking advantage of regional competitive advantages”.
This is the fourth policy paper in a series of six articles that make up a major study called “Europe’s energy transition: balancing the trilemma”, which we will publish by the end of 2025.
MPE/ADB // ADB.
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