Carlos Torres Vila 14 Mar 2025

Carlos Torres Vila at CERAWeek: “Growing demand for energy means banks need greater scale to finance it”

In Houston, BBVA Chair Carlos Torres Vila underscored the expected sharp rise in energy demand, especially electricity, and the enormous investment needed in infrastructure and innovation to address this challenge. “The growing demand for energy means European banks need greater scale to finance it,” he said while participating in CERAWeek 2025, the leading global event in the energy sector organized by S&P Global. The BBVA Chair also stressed the importance of capital markets and shareholders determining the results of the consolidation process underway in countries such as Spain, Italy and Germany.

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Carlos Torres Vila noted that according to the International Energy Agency, global demand for energy could increase from 30 PWh in 2023 to 58 to 80 PWh in 2050. In his opinion, this notable increase in growth is mainly due to four reasons. First, the importance of guaranteeing affordable energy, which is essential to the advancement of developing societies and the competitiveness of mature markets. Second, the need for energy self-sufficiency, key to the current geopolitical environment. Third, the necessary decarbonization of the economy to fight global warming. And finally, the rise of artificial intelligence and investment in data centers.

"We find a combination of factors that represent an enormous opportunity for investment and growth in energy infrastructure and renewables"

The BBVA Chair also referred to the challenge posed by the rising demand for electricity for transmission and distribution grids: “In this area, additional investments will be needed to connect new customers in emerging markets and modernize or replace old grids in developed countries, also ensuring full access in rural areas.”

For Carlos Torres Vila, “We find a combination of factors that represent an enormous opportunity for investment and growth in energy infrastructure and renewables.” He therefore emphasized that Europe needs larger banks to finance the investment associated with this growth. In this sense, he emphasized the importance of capital markets and shareholders determining the outcomes of the consolidation processes underway in countries such as Spain, Italy and Germany, with the aim of creating larger institutions that are better prepared to handle the enormous investment challenges. According to the report published by Mario Draghi, the European Commission estimates that the region needs between €750 billion and €800 billion per year to modernize infrastructure, promote technological transformation and progress in the energy transition.

In this regard, the BBVA Chair recalled that energy renewables are increasingly cost-competitive, especially in countries rich in solar and wind power, like Spain, which is in a unique position. According to BloombergNEF, renewable energy is the cheapest form of energy in various countries that make up 71 percent of global GDP. “Renewable energy can make a decisive contribution to a low carbon model, especially if they have storage systems or flexible generation that ensure the stability of the grid,” Torres Vila explained.

Carlos Torres Vila emphasized the importance of capital markets and shareholders determining the outcomes of the consolidation processes underway in countries such as Spain, Italy and Germany.

Another trend that was widely discussed at CERAWeek is the increasingly critical role natural gas plays in the decarbonization process. The BBVA Chair agreed with other leaders from the energy sector that “natural gas is becoming an essential fuel for the energy transition.” For example, the low cost of U.S. gas is driving large liquified natural gas projects to supply various global markets, including Europe. Although it is a fossil fuel with CO2 emissions, it has a lower carbon footprint than oil or coal. In addition, the gradual adoption of carbon capture and storage technologies helps to reduce the impact on the climate.

Carlos Torres Vila met with leaders from the global energy industry from March 10th - 14th in Houston, Texas (U.S.). Organized by S&P Global, CERAWeek is the top energy event in the world, bringing together the business community, regulators, authorities and experts, as well as renowned representatives from other sectors, such as the financial, technological and industrial industries.

With the title ‘Moving ahead: energy strategies for a complex world,’ CERAWeek 2025 focused on the challenges related to energy security. In addition, the forum reflected on the four major factors that are driving the growing demand for energy globally (4Ds): population growth (demographics); economic development in emerging countries (development); digitization and artificial intelligence; and decarbonization. The challenging international climate adds another important variable (a fifth D): defense and its implications for strategic autonomy (defense).

On September 12, 2024, BBVA announced the creation of a hub in Houston with the aim of becoming the bank leading the energy transition in the U.S. This new office in Houston joins the financing teams working in New York, London and Madrid. Furthermore, at the 2024 Climate Week held in New York, BBVA announced a partnership with KKR and a $200 million investment in the global climate strategy of investment companies.