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Iberdrola discusses Spain’s economy post COVID-19

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Ignacio Galán, Iberdrola Chief Executive Officer, addressed the Spanish Confederation of Business Organizations summit in Spain (CEOE), and discussed economic recovery from the COVID-19 crisis.

Galán stated: "The electrification of the economy is key to economic recovery, as the sector delivers one of the greatest multiplier effects. For every internal job generated in our sector, 12 are generated in sectors such as construction, manufacturing, engineering and installation services.”

The National Energy and Climate Plan, which is being processed by the Spanish Parliament, means that Spain already has a roadmap for investment in the sector over the next decade to generate 300 000 jobs.

Galán urged that the implementation of the National Energy and Climate Plan be accelerated to 2025, which "would have an immediate effect on economic growth and employment, increasing competitiveness, reducing our energy dependence on foreign countries, improving the balance of payments and reducing our harmful gas emissions, all without putting pressure on public finances".

On electricity networks, Galán said: "A significant increase in investment in distribution networks could generate up to 40 000 jobs in Spain.” But for this to happen, measures must be adopted such as "the elimination of the maximum investment limit of 0.13% of GDP that we have in our legislation".

In renewables, accelerating the installation of new capacity to 2025 "would mean investments of €32 billion and would quickly generate 90 000 jobs throughout the country, especially in rural areas.

The President of Iberdrola has also advocated increasing energy storage capacity, which brings flexibility to the system: "An investment of €5 billion in hydroelectric pumping and batteries until 2025 would create 14 000 jobs".

Ignacio Galán also outlined the benefits of promoting electrification in other energy areas of the economy, which will lead to significant investments in sectors such as heating and cooling: "The replacement of traditional boilers with heat pumps could see €40 billion euros of investment and 110 000 jobs among manufacturers and installers, while improving air quality in cities.”

In the transport sector, bringing forward investments in infrastructure for recharging and electrifying urban bus fleets would mean investments of €5 billion and 14 000 jobs.

Finally, Galán urged Spain not to miss out on the development of new technologies, such as green hydrogen. "Decarbonising 25% of industrial hydrogen would mean investments of more than €4 billion and the creation of 11 000 jobs in a new national industry," he said.

To take advantage of the opportunities presented by the electrification of the economy "we have the technology, the skilled workforce and the access to the necessary financial resources," said Ignacio Galán. But a number of measures must be taken as a matter of urgency.

Among them, he called for the reorientation of taxation based on the principle of 'the polluter pays', the revision of the electricity market model solving the economic situation of the basic and backup electricity generation technologies necessary for the security of supply, the streamlining of administrative processes, the increase in support for research, development and innovation, the training of teams of professionals adapted to this new digital and renewable reality and the design of an industrial policy that promotes the development of national industry in these areas.

The Chairman of Iberdrola reaffirmed Iberdrola’s help to support the process. "We are accelerating our investments, which will reach €10 billion this year, almost doubling the average of the last few years. We have also advanced around €5 billion in orders to our suppliers, and we will continue to support the wider economy and jobs in Spain and across the world.”

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