The Alliance for the Competitiveness of the Spanish Industry released its report “Plan for Affordable Electricity for the Spanish Industry”, a document that proposes a package of five structural measures to reduce the electricity cost borne by industry, strengthen its competitiveness, and curb offshoring trends.
Prepared by EY Consulting, the report starts from a clear diagnosis: “In Spain, industrial tariffs, excluding taxes, have risen between 35% and 60% since 2019 and, once taxes are included, our country faces a significant cost disadvantage in electricity compared with other European partners, such as France and Germany, jeopardizing Spanish competitiveness,” explained Antonio Hernández, partner in charge of Regulated Sectors and Economic Analysis.
“Nevertheless, we have a historic opportunity to attract industry thanks to our abundance in renewable sources, but to seize it it is necessary to undertake a structural reduction of charges and taxes that improves competitiveness, promotes the creation of new jobs, strengthens economic activity and, consequently, generates new tax revenue,” he assessed.
According to the Alliance, the joint application of the proposed measures would reduce the final industrial price by between 10% and 30%, bringing it closer to the levels seen in countries such as France or Germany.
“Affordable energy is not only a technical or short-term issue, it is a central element of industrial policy. Without competitive electricity prices there can be no reindustrialization,” said Carlos Reinoso, spokesperson for the Alliance, during the presentation. In his view, “a more competitive electricity is key to making decarbonization and the harnessing of renewable potential viable.”
For its part, the president of CEOE, Antonio Garamendi, has stressed that, with the endorsement of Royal Decree-Law 7/2026, some measures have been adopted that point in the right direction for businesses, by temporarily reducing some additional charges on generation prices, but he made clear that “spot or temporary measures are not enough.” “From CEOE we clearly defend that the measures that truly contribute to reducing energy costs and strengthening competitiveness must be consolidated structurally,”
Five measures for a competitive energy
The document proposes a coherent set of structural reforms with an impact on the industrial electricity bill. “Because energy-intensive industry needs regulatory stability to invest. Temporary solutions are no longer enough,” the Alliance’s spokesperson stressed.
- Elimination of IVPEE. The Alliance calls for abolishing the Impuesto sobre el Valor de la Producción de Energía Eléctrica (IVPEE), currently at 7%. The measure would reduce the wholesale market price and pass reductions through to all consumers, while safeguarding the financial sustainability of the electricity system. “Keeping IVPEE in a context of amortizing the electric deficit and increasing international competition is an unnecessary drag on the Spanish economy in general, and on the competitiveness of our industry in particular,” Reinoso stated.
- Extension of the 85% relief from the Electric Special Tax. The report proposes extending the 85% relief from the Impuesto Especial sobre la Electricidad to the entire manufacturing industry, lowering the current threshold and tying access to verifiable energy-efficiency commitments. In this way, Spanish taxation would align with European rules and the number of beneficiary companies would be significantly expanded.
- Integration of the costs of technical constraints into the tariffs. The Alliance argues that the costs arising from technical constraints of the electric system, today passed directly into the energy price with high volatility, should be included in the access tariffs, as is the case in most European countries. This measure would stabilize those costs and reduce the impact on industrial customers. In doing so, the organization advocates reducing the balancing services borne by consumers due to the reinforced operation, which to date have increased the bill by more than €1.8 billion in 2026.
- Permanently lowering tariffs by 80% for high-consumption users. The report calls for permanently consolidating the 80% reduction in access tariffs for high-consuming industry, avoiding annual extensions that create uncertainty. This predictability is key to facilitating investments in electrification and decarbonization of industrial processes.
- Effective application of compensation for indirect CO₂ costs. The fifth measure proposes ensuring real delivery of 75%–80% aid intensity in compensations for indirect CO₂ costs, providing a sufficient budget and allowing at least 25% of the revenues from emission rights auctions to be allocated to this purpose. The objective is to prevent carbon leakage and protect sectors most exposed to international competition.
In this respect, the Alliance notes that €1 billion would be needed to reach the maximum authorized level, equating the situation of the Spanish industry with that of the French and German industries.
Affordable energy as a driver of reindustrialization
The Alliance frames these proposals within the context of European competitiveness strategies, such as the Clean Industrial Deal and the Affordable Energy Action Plan, and stresses that Spain has a historic opportunity to attract industrial investment, provided that a structural reduction of electricity costs is undertaken.
The presented report highlights the significant current gap in electricity prices, showing that many industrial companies in Spain pay substantially more for electricity than in neighboring countries. This gap not only limits the ability to compete in global markets but also threatens to widen further given the greater flexibility introduced by the new European State Aid framework, which could increase the competitive imbalance within the internal market.
This energy gap also translates directly into employment, as it raises the risk of relocating industrial activity to lower-cost countries with more stable support frameworks. The Alliance notes that every postponed or relocated investment decision threatens thousands of direct and indirect jobs and the cohesion of the productive fabric. Ensuring competitive electricity prices for industry is not only an economic issue but a prerequisite to preserve industrial employment, ensure the continuity of value chains, and sustain a growth model based on industry, innovation, and quality employment.
Spain today holds a clear competitive edge thanks to its electricity generation system, particularly its renewable potential. “The challenge now is to ensure that this advantage translates into genuinely competitive electricity prices for industry. If we can do that, not only will we prevent the electricity cost gap from continuing to erode our productive fabric, but Spain could establish itself as an industrial hub in Europe,” emphasized Reinoso.
In this sense, the Alliance for the Competitiveness of the Spanish Industry has reiterated its willingness to work with public authorities to turn these proposals into concrete regulatory measures that reinforce the country’s industrial base.
“Royal Decree-Law 7/2026 has gone in the right direction and has shown that it is possible to act quickly when industrial competitiveness is at stake. Now it is essential to take the next step: make these measures permanent and complement them with new structural reforms that ensure a long-term competitive electricity price,” concluded the Alliance’s spokesperson.
