Energy transition is not only about renewables says Iberdrola's innovation chief

At a pivotal time for the global energy transition and in the context of rapid global geopolitical change, Iberdola’s Chief Innovation Officer Agustín Delgado, highlights the importance of energy security and European competitiveness.

The urgency of Europe's energy transition was a central theme at Enlit on the Road in Valencia, where various representatives of the global energy giant echoed the recent comments of Iberdrola Chairman Ignacio Galán, emphasising that the time for discussion is over; now is the moment for decisive action to secure a sustainable and competitive energy future for Europe.

Delgado framed the energy transition as a multifaceted challenge extending beyond simply deploying renewable energy sources, saying: "This energy transition is not only about renewables. It is also about security of supply and about competitiveness."

He highlighted Europe's unique position, lacking vast fossil fuel reserves but possessing abundant renewable resources and the potential to forge a new energy era. Europe's transition, according to Delgado, should be driven by three key imperatives: bolstering security of supply, enhancing economic competitiveness, and safeguarding the environment.

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Research and development as the catalyst

A crucial element in achieving European competitiveness lies in sustained investment in Research and Development (R&D). Iberdrola's commitment is evident in its substantial €400 million R&D expenditure in 2024.

Looking ahead, Delgado outlined the strategic direction of these investments. He pointed to the continuous need to "improve and increase how we do the renewables, how we harness the power of wind, water and sun." However, the innovation focus extends beyond generation.

Robust and efficient energy networks

Delgado stressed the critical role of robust and efficient energy networks in facilitating the transition, underscoring the necessity for smart grid technologies and infrastructure upgrades to accommodate the increasing penetration of renewable energy and the electrification of various sectors.

"We have to make our networks even more reliable, even more effective, to move all the power that is needed in this energy transition, because we are going to electrify the climate," he explained.

Transforming energy consumption

Furthermore, Delgado highlighted the imperative of transforming energy consumption patterns. With 80% of current energy usage still reliant on fossil fuels, a fundamental shift in end-use is essential.

"If we don't change these fossil habits, we are not going to advance in this energy transition," he stated.

Iberdrola is actively working to "increase how we use the energy and we have to facilitate our customers to change the uses of energy to incorporate these renewables that we know how to do it, mostly with electricity," referencing the importance of promoting electric vehicles, heat pumps, and broader electrification initiatives.

Developing new business models

Recognizing that transformative change often originates from novel ideas, Delgado underscored Iberdrola's commitment to engaging with the startup ecosystem, especially via the PERSEO programme.

"We have found that in this energy transition, it's not only about big utilities or integrated companies, but it appeals to the whole society," he noted.

He acknowledged the vital role of new companies developing innovative business models that challenge conventional approaches, ultimately driving progress.

Iberdrola actively scouts and collaborates with these emerging players through its corporate venture fund, investing in and supporting their development, and even integrating promising solutions into their own business models.

"This way, we understand what is going on beyond our core operations," said Delgado.

Accelerated adoption of clean technology

Turning his attention to the Spanish energy transition, Delgado expressed optimism. "I think Spain, within the European context, is very well positioned for this energy transition to happen," he asserted, citing the nation's abundant land, wind, and solar resources, coupled with a thriving ecosystem of renewable energy companies.

While Spain has successfully met its renewable energy targets for years, Delgado acknowledged a slight lag in the widespread adoption of these clean energy sources in sectors like electric vehicles and heat pumps.

However, he anticipates a significant shift. The current lower electricity prices in Spain, approximately 30% less than the European average, are expected to become even more competitive in the future due to the country's strong renewable energy base.

Delgado believes this cost advantage, combined with a supportive ecosystem and anticipated favourable policies for 2025-2030, will attract energy-intensive industries to Spain, further accelerating the energy transition. "I think we are going to be able to attract industries that have a big energy cost, and they will be willing to come here because industries like to be in places in which their costs are cheaper," he concluded.