Spain Could Save €60 Billion by Transitioning Away From Fossil Fuel Heating

A study by the Platform for the Decarbonization of Heat and Cold suggests Spain could realize savings of €60 billion by phasing out fossil fuel-based heating systems (coal, oil and natural gas). This potential economic benefit is particularly relevant given current geopolitical tensions, especially in the Middle East, and their impact on global energy markets.

Renewable Heating Roadmap and Urgency of Transition

In June 2024, the Platform published the Renewable Heating Roadmap, a detailed plan for transforming Spain’s residential heating and hot water sector. The roadmap advocated for a zero-emissions scenario aligned with limiting global temperature increases to 1.5 degrees Celsius. Recent climate change impacts have underscored the urgency of a rapid and orderly transition in the residential energy sector.

Economic Analysis: Zero Emissions vs. Trend Scenario

The recent analysis evaluated two scenarios based on the Renewable Heating Roadmap: a zero-emissions scenario and a ‘trend’ scenario representing continued adherence to current decarbonization commitments. The results indicate that the zero-emissions scenario is economically, socially, and cost-effective in the long term.

The zero-emissions pathway would require an average annual investment of approximately €20 billion over the next 25 years. In contrast, the total accumulated cost under the ‘trend’ scenario is projected to be around €60 billion higher by 2050.

Benefits of Decarbonization

The analysis highlights the economic and social benefits of transitioning to renewable thermal solutions, including:

• Reindustrialization
• Job creation
• Reduced energy dependence on fossil fuel exporting countries, enhancing energy security

Renewable Thermal Solutions

The study considers various renewable thermal solutions, including heat pumps, solar thermal, sustainable biomass, and renewable district networks. It proposes assigning each home a solution tailored to its specific needs, encompassing both heating and cooling, as well as domestic hot water (DHW). The analysis quantifies both capital expenditure (CAPEX) and operational expenditure (OPEX), allocating the majority of public investment to vulnerable households.

The Cost of Delaying Action

The report’s authors emphasize that delaying action, implementing fragmented policies, or sending contradictory signals will not reduce costs but will instead transfer them to the future, increasing the economic burden on households and public finances. They argue that the window of opportunity for a cost-efficient, fair, and orderly transition is currently open, and failing to act will result in a more expensive, unequal, and difficult transition.

Spain’s Heating and Cooling Plans

Currently, Spain is not fully prepared to implement Article 25.6 of the Energy Efficiency Directive (EED), which requires regulatory changes, improved coordination, and strengthened support mechanisms. There is a noted lack of focus on decarbonizing heating and cooling, and limited experience in energy planning at the local level [1]. New regulations are needed to establish a legal framework for local heating and cooling plans, requiring strengthened coordination across all levels of Spanish government.

EMB3Rs Platform for Heat and Cold Matching

Platforms like EMB3Rs are emerging to facilitate the matching of heat supply and demand, enabling industries generating excess heat to provide it to nearby users. This approach can provide potential income for heat sources and contribute to decarbonization goals [1].

Sources:

• [1] EU Tracker – Local heating and cooling plans in Spain
• [2] EMB3Rs – Heat and cold matching platform