A Basque blueprint for a resilient energy backbone

During keynote speeches at Enlit Europe, building out a resilient energy and power system was discussed as a key priority, with the electric grid its backbone.

“It is time for us to grow up. This is the energy system that we have.”

So said Iberdrola’s Agustin Delgado Martin yesterday at the opening of the event in Bilbao, Spain.

The utility giant’s Chief Technological Officer decried the current state of the global energy system, which remains 80% based on fossil fuels, with a 33% rate of energy efficiency. 

He also cited the electrification of the system, which he says is currently at 21% to 23%, hopefully doubling to between 55% or 65% in the near future.

“This means more than double the electricity provision… technology and the market are driving this new demand for electricity and decarbonisation is only feasible through electrification. 

“We need to build this future to make our energy system more resilient.”  

For Martin, the ‘whys’ for this boil down to a few key points: geopolitics, economics, and physics.

On geopolitics and security of supply. Martin likens this to the decisions of buying a car based on fossil fuels and purchasing a solar panel. The former locks a consumer into years of dependence on a volatile market, he says, whereas conversely, the decision to instal a PV panel buys years of energy freedom, allowing consumers to build and manufacture their own energy. 

In terms of economics, Martin references the ‘S-curve’ of renewable and electrified technologies, stemming from rapid technological development and cost reduction. 

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“We are not in a [state of] change. We are in a technological revolution, based on cost reduction and S curve adoption.”

Thirdly, he says, it comes down to the physics.

Namely, producing and using electricity with renewables and efficient end-uses, like electric vehicles or heat pumps, is three to four times more efficient than using fossil fuels.

Grids the bottleneck and the backbone

To build this resilient energy future, according to both Martin and Mikel Jauregi, Minister for Industry, the Energy Transition and Sustainability in the Basque Government, the electricity grid must be the priority. 

Specifically, a massive scale-up of grid infrastructure is required to handle new, decentralised sources of generation and the huge increase coming from electrified demand. 

“What is the bottleneck to decarbonisation? The grids are the bottleneck across Europe," said Jauregi.

“In the Basque Country we have full capacity of electric grids. We just secured more than 40% expansion capacity for the grid, and that's something that is necessary, not only to have some of the companies and some of the industry that want to decarbonise, [but] to help grow some of the existing industry, to grow that new industry that we need in order to remain relevant at a global stage.”

Jauregi’s sentiment was echoed by Martin: “Grids are the backbone of the energy system. We need to build massively [in the] grids for this energy future. We have to increase the investment in the grid, because we have new electrification of demand.”

Jauregi and Martin’s comments are timely, coming a week after Iberdrola España stated it will increase investments in the Basque Country by 50% in the 2025-2028 period, totalling €1.3 billion ($1.5 billion).

The investment is primarily aimed at electrical networks to integrate new industrial and residential demand and reinforce the region's position as a digitalisation leader.

Additionally, says Iberdrola, taking into account purchases from hundreds of local companies, tax contributions, salaries and dividends to Basque shareholders, the total impact will reach €12 billion ($13.9 billion) by 2028.