CIUDAD REAL, Spain — For the residents of Ciudad Real, a town about a two-and-a-half-hour drive south from Madrid, the link to wind power runs deep. Don Quixote, the fictional knight who famously tilts at windmills he mistakes for giants, is believed to hail from here.
Today, instead of windmills, the land surrounding this southern Spanish town hosts a sprawling factory manufacturing wind-turbine blades, each as long as a tennis court. At the Vestas facility, roughly 1,000 workers build up to 200 blades a year, painting and shipping them to customers across Spain and beyond.
Ciudad Real’s affinity for green energy is not unique in Spain. Rather, it illustrates a broader trend in a country that has seen its renewable power generation double since 2019. Last year, Spain produced 75% of its electricity from low-carbon sources, with wind and solar contributing 42%, according to research group Ember.
“The [Iberian] region is showing what the energy transition looks like,” said Artur Patuleia, a senior policy advisor with climate think tank E3G, including Portugal in his analysis.
Spain’s renewable investments took on new significance when a fresh energy crisis hit Europe at the end of February, disrupting flows through the Strait of Hormuz — a vital artery for roughly one-fifth of the world’s oil supply — after the U.S. and Israel launched a war on Iran in late February. As electricity prices surged across much of the bloc, largely driven by gas, Spain’s remained strikingly low.
While Spain’s energy model isn't irreproachable, particularly its low level of electrification, the crisis has made clear that a country once seen as underperforming in renewable has come a long way.
For Spanish Prime Minister Pedro Sánchez, it’s a chance to score a political point.
“Spain can demonstrate examples of how investing in renewable energy helps our households experience a lower impact from gas price increases,” Sánchez told reporters in Brussels last month.
Spain’s renewable revolution
Like many other countries, Spain built its first solar farm in the mid-1980s, with the first wind projects following a decade later. In 2007, Madrid introduced subsidies that rewarded producers for every gigawatt of electricity generated, fueling an initial wave of investment in the sector.
However, the global financial crisis of 2007-2009 soon made the scheme unsustainable. Beginning in 2010, the government started scaling back renewable subsidies, which were fully scrapped by 2015.
By 2017, the southern European country counted less than 50 gigawatts of renewable energy power, a capacity that had remained largely unaltered since 2013, while generating some of the largest electricity bills in Europe.
Sánchez’s ascent to power in 2018 on a progressive platform marked a turning point. A smoother permitting process, significant investments in grid development, and targeted tax breaks all helped bolster clean energy projects.
Yet it wasn’t until 2022, after Sánchez injected billions of euros in EU post-pandemic funding into renewables and introduced a support scheme for wind and solar, that the boom became visible. Since 2022, solar capacity has almost tripled to over 41 gigawatts this year, while onshore wind capacity has grown to more than 32 gigawatts, according to Independent Commodity Intelligence Services (ICIS), a London-based energy consultancy.
That acceleration had a clear catalyst, analysts say: Russia’s full-scale invasion of Ukraine in February 2022.
“Spain learned the lesson from the Ukrainian war,” said Ismael Morales, a climate policy specialist at Fundación Renovables, a Madrid-based research center. EU members had two options at the time: slash fossil fuel consumption altogether — not just from Russia — or diversify gas supplies away from Moscow and increase imports of liquefied natural gas. While many European governments largely chose the latter, Madrid opted for the former. Under RepowerEU, the bloc’s response to the energy crisis triggered by the war, Brussels had called on countries to wean themselves off Russian fossil fuels by speeding up the energy transition.
That’s not to say that everything went according to plan.
Exactly a year ago, the Iberian peninsula's electricity supply faced its worst outage in decades, leaving everything from hospitals and factories to schools without vital power for up to 16 hours amid a surge in demand.
Anti-renewable opponents were quick to blame an abundance of green energy for unbalancing the grid and even if a final investigation proved that wrong, ascribing the blackout to “multiple factors,” the industry spent months rejecting the accusations.
Homegrown green energy scores political victory
For Sánchez — whose forceful rebuke of the U.S. war in Iran and a personal clash with U.S. President Donald Trump has turned into a darling for progressives worldwide — the most recent crisis has proven that his pro-climate policies are paying off.
“The global situation leaves no room for hesitation. We face a clear choice: this is about turbines or turbulence,” Sánchez said last Tuesday as he kicked off the annual meeting of WindEurope, the EU’s wind power lobby, in the Spanish capital.
Sánchez’s call to keep investing in green energy comes on the heels of a period of green disenchantment, with many European leaders calling for looser climate policies and the European Commission embracing a broader wave of deregulation.
A mid-March report by Ember found that Spain’s wind and solar helped prevent electricity prices from being set by costly gas. While gas influenced electricity prices in Spain in just 15% of hours in 2026, it did so in 89% of the time in Italy. As a result, Spain’s wholesale electricity price turned out to be 32% lower than the EU average in the first half of 2025.
The way European electricity markets work is that the price is set by the last, costlier form of fuel added to the mix, typically gas or coal. That has often led to frustration among countries with strong renewable buildouts who lament their prices are made artificially higher.
So-called marginal pricing has been particularly under fire since the 2022 energy crisis, when political leaders investigated the energy market design to fix surging prices. In 2023, the EU suggested an overhaul of the electricity market design with a view to amend the marginal pricing system, which was eventually maintained.
Analysts, however, warn that obsessing over the pricing mechanism is the wrong approach.
“Looking to change marginal pricing as a way to achieve cheaper prices is the wrong diagnosis,” noted Chris Rosslowe, a senior energy analyst with Ember and one of the authors of the report. “The marginal pricing system is not the problem. The problem is reliance on gas-fired power.”
There are shadows in sunny Spain too
However, analysts warned that portraying Spain’s case as a perfect model would be an oversimplification.
“Even if the picture looks very good on the price side, for consumers to access this price there needs to be electrification,” noted Patuleia, the E3G analyst, arguing that “on the demand side, it has been more difficult.”
In essence, while renewables dominate the country’s electricity mix, Spaniards still depend heavily on fossil fuels to heat their homes and power their cars. This gap is especially evident in e-mobility, where electric vehicles account for just 5–6% of the market — far behind Portugal’s 18–20% and the Netherlands’ roughly 30%, according to 2024 data from the European Automobile Manufacturers’ Association.
That’s precisely why, despite low power prices, Spain’s government in March presented a €5 billion emergency package containing measures such as cutting VAT and excise duties for gas and transport fuels.
To help countries speed up electrification, Brussels has pledged to introduce its first-ever electrification target by the summer.
If overall electricity demand doesn’t grow, the profitability of new renewable investments is at stake, explained Morales of Fundación Renovables, warning that this would stall the energy transition and reduce the benefits for households and industries.
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