At a recent meeting of the Spanish Green Growth Group, key players in the cleantech ecosystem praised the new Industry Law as a catalyst for transforming Spain into Europe’s next industrial hub for clean technologies. Speakers pointed to the challenge of achieving net-zero emissions as an opportunity for the country.
“Cleantech presents a vast growth opportunity, and Spain is well-placed to lead green reindustrialization,” said Sonia Zorrilla, head of Equity Investments in Sustainability at BBVA, during the forum. To achieve this, the sector must speed up, foster an attractive environment for clean technologies, enhance industrial cleantech manufacturing as a national project, collaborate with industry, and stimulate demand.
The BBVA executive added that the public sector should play a crucial role in this process. "To accelerate scalability, the government could legislate to stimulate cleantech investment, such as allocating part of the Emissions Trading Scheme revenues to cleantech projects. It could also create tax incentives for innovation, and provide capex subsidies, among other measures,” she said.
The industry expert stressed the need for cooperation with financial institutions to support clean technology investments and de-risk debt, so that “banks can act as multipliers of this investment.” She also emphasized streamlining authorization processes, simplifying grid connection procedures through a one-stop administration, setting binding deadlines for permits, and other measures.
Initiatives like Spain's Industry Law and Europe's Net Zero Industry Act are a good start but insufficient to lead. Bianca Dragomir, head of Cleantech for Iberia, noted that while European researchers author 30 percent of innovation papers, only 7 percent of new market products originate from Europe.
Mario Draghi's recent paper, "EU Competitiveness: Looking to the Future," points out this necessity for Europe to lead the global green transition. The report advocates for a combined plan for decarbonization and competitiveness, estimating an annual investment of around €800 billion.
The role of the private sector
Conference attendees concurred that public-private partnerships are essential for bridging the financing gap. This is where the banking sector plays a crucial role. “Over two years ago, we began investing private equity in decarbonization funds, which invest in companies developing disruptive and innovative technologies that need to scale,” explained Sonia Zorrilla of BBVA. This investment has provided the bank with valuable insights into how these technologies function, “enabling us to finance these companies during their scaling phase, as we understand their business models, technologies, and associated risks.”
In 2023, adopting a more comprehensive approach, the financial institution established a global advisory and financing unit dedicated to clean technologies, introducing a specialized risk framework for cleantech.
Another crucial lever for scaling projects is promoting alliances and agreements with specific initiatives. Sonia Zorrilla highlighted the example of the agreement between BBVA and Malta Inc., involving a contract for the sale and purchase of renewable energy from a pilot plant. “Agreements like this enable startups or newer technologies to develop their demonstration projects by leveraging certainty of demand and adding credibility to their business models. This helps them achieve the necessary scale more quickly to drive the transition,” explained the BBVA manager.
Malta Inc., a U.S. company pioneering electrothermal solutions for long-term energy storage, has chosen Spain for this new project. “Spain was the birthplace of molten salt storage in solar plants, which was then exported worldwide,” explained Michael Geyer, CEO of Malta Iberia Pumped Heat Energy Storage S.L.U. “Currently, it is challenging to find funding for pilots in Europe. Regulation is needed to accelerate project scalability and to stimulate clients, investors and lenders,” he said.