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Elite Networks, Electricity

Corporations, and the

Low-carbon Energy Transition:

the case of Spain

Author: Supervisor:

Álvaro Conde Soria Dr. Mehdi P. Amineh

Student ID: 12782726 Second reader: Dr. R.J. Pistorius

University of Amsterdam

Graduate School of Social Sciences

Master Political Science: MSc. Political Economy

Master’s thesis Research project: The Political Economy of Energy

Date: 5 June 2020

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Table of Contents

Table of Contents 2

Acknowledgements 5

Abstract 6

Political map of Spain 7

List of Tables and Figures 8

List of Abbreviations 9

Chapter 1: Introduction 11

1.1 Focus and Objectives of the Research 11

1.2 Literature Review 14

1.3 Theoretical and Conceptual Framework 19

1.4 Brief Argumentation and Hypotheses 25

1.5 Method and Data 27

1.6 Organisation of the Research 29

Chapter 2: Spain: Energy Structure, Policy and Actors between 1994 and 2019 31

2.1 Introduction 31

2.2 The Energy Structure of Spain 32

2.2.1 Domestic resources, production, and consumption 32

2.2.2 The evolution of the electricity mix 35

2.2.3 Net energy imports 39

2.3 Energy—transition—Policy and Actors 41

2.3.1 The State and Specialised Institutions 41

2.3.2 The Electricity Oligopoly 46

2.4 Conclusion 49

Chapter 3: The Political Class and the Electricity Oligopoly in Spain 51

3.1 Introduction 51

3.2 Revolving doors, conflict of interest, and power structure 52 3.3 The connections between State and Market actors 53

3.3.1 Endesa, the jewel of the crown 59

3.3.2 Iberdrola, close to power from the very beginning 62 3.2.3 Naturgy, a natural gas giant in the electricity market 65

3.4 Conclusion 67

Chapter 4: Structural Power, Political Influence, and Energy Transition Policy 69

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4.2 The core alliance and energy transition policy 69

4.2.1 Electricity Sector Liberalisation Law 70

4.2.2 The new regulatory regime of 2012-2013 72

4.3 The structural leverage of the electricity oligopoly 74 4.4 The political influence mechanisms of economic structural power 77

4.5 Conclusion 79

Chapter 5: Conclusions 80

Bibliography 85

Books and book chapters 85

Peer-reviewed articles 87

Primary resources 90

Newspapers, digital media and online sources 95

Appendices 98

Appendix I: Transcript interview 98

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Acknowledgements

A combination of personal and general circumstances has made the writing of this thesis a more significant challenge than I previously thought, with some weeks being particularly rough. This dissertation is the result of a lot of work and effort; from reading, writing and editing, to self-discipline and organisation.

I am very grateful to my family, especially my grandparents, for providing me with the necessary economic support to be able to study this MSc in the University of Amsterdam and with the personal stability during these uncertain times at which this thesis has been written. Similarly, to my partner Ekin, for her continuous support and motivation during the development of this process.

I would also like to thank Dr. Mehdi P. Amineh, for introducing me to the field of energy studies and for his understanding and insight during the writing of this thesis.

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Abstract

The energy transition is a complex process that aims to make energy systems more sustainable in the medium and long term by expanding on a large scale the use of renewable energy technologies, deep electrification, and energy efficiency. However, the energy transition is not only a socio-technical process, but also a highly dynamic, contested, and disruptive political project that has power and power dynamics at its core. By exploring the high-level connections between the political class and the three dominant electricity corporations, this thesis discusses how the relationship between these two actors has influenced the energy transition in Spain between 1994 and 2019. A Social Network Analysis (SNA) is conducted to map these connections and relationships that identify the elite network in order to be able to establish a correlation with energy transition policy. The premise is that mechanisms such as that of ‘revolving doors’ represent a significant reason behind the lack of success in shifting the incumbent fossil fuel and nuclear-based electricity regime. Ultimately, the elite network identified via the SNA is identified as a reflection—not causation—of the influence that electricity corporations exert over public authorities regarding energy transition policy. Senior policymakers and electricity corporations are identified to form a historic block aimed at preventing that the energy transition challenges the status quo. It is the structural power that the three dominant electricity corporations hold over the state that allows these actors to influence policymaking and prevent genuine change from taking place. The ability of corporations to exert effective structural influence over senior policymakers is identified as the concrete materialisation of the state-society complex in Spain. By making use of various strategies and mechanisms, incumbent corporations are effectively able to set the energy agenda and use intertwined dimensions of power to safeguard the status quo.

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Political map of Spain

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List of Tables and Figures

Tables

Table 2.1 Distribution of final energy consumption by source and by sector in Spain from 1990-2016 in millions of tonnes of oil equivalent (Mtoe) and percentages. p.35.

Table 3.1 Top cases of revolving doors between the Spanish political class and the three dominant electricity corporations. pp.55-56.

Figures

Figure 2.1 Sankey Diagram of energy in Spain in 2017, with figures in Ktoe and where renewables include renewable energy and waste. p.34.

Figure 2.2 Evolution and breakdown of primary energy consumption in Spain from 1990 to 2017. p.34.

Figure 2.3 Share of renewable energy in gross final energy consumption. Spain and the EU average from 2004 to 2018. p.36.

Figure 2.4 Structure of electricity generation in 2018. National electricity system (%). p.37.

Figure 2.5 Structure of installed power as of 31.12.2018. National electricity system (%). p.37.

Figure 2.6 Evolution of renewable/non-renewable generation and CO2 emissions associated with national electricity generation in Spain from 2009 to 2018. p.38.

Figure 2.7 Evolution of renewable energy generation. National electricity system (GWh). p.39.

Figure 2.8 Evolution of installed renewable power. National electricity system (MW). p.39 Figure 2.9 Energy import dependency of Spain and the EU average in percentages from 2000 to 2018. p.40.

Figure 2.10 Evolution and breakdown of the electricity tariff deficit in Spain in billions of euros from 2000 to 2013. p.45.

Figure 3.1 Mapping via Social Network Analysis of the connections between the top senior members of the political class and the three dominant electricity corporations. p.57.

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List of Abbreviations

Aelec New Spanish electricity industry association CNMC Spanish Competition and Markets Authority CORES Strategic Reserves Corporation Spain CTC Costs of Transition to Competition EC European Commission

EU European Union FiT Feed-in Tariff

GDP Gross domestic product GHG Greenhouse Gas GNF Gas Natural Fenosa GW Gigawatts

GWh Gigawatts per hour

IDAE Institute for Energy Diversification and Saving

IEA International Energy Agency

IRENA International Renewable Energy Agency Ktoe Thousand tonnes of oil equivalent

MITECO Ministry for Ecological Transition and Demographic Challenge Mt Million tonnes

Mtoe Million tonnes of oil equivalent MW Megawatts

OECD Organisation for Economic Co-operation and Development PP People’s Party

PSOE Social democratic Party RD Royal Decree

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RET Renewable energy technologies SNA Social Network Analysis

PV Photovoltaic

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Chapter 1: Introduction

1.1 Focus and Objectives of the Research

Despite much to gain in terms of enhancing its energy security and promoting industrial development, the Kingdom of Spain (Spain) has not been able to transform its energy model during the past two decades structurally. Due to its geography and climate, Spain is a country with a vast potential to produce renewable energy. Up until 2011, Madrid had earned a worldwide leadership reputation in the development and deployment of renewable energy technologies (RET), especially wind and solar. However, the effects of the 2008 financial crisis and a series of policy U-turns heavily damaged Spain’s position as a beacon of the energy transition1. Politics lie at the core of the matter: the energy transition represents a significant challenge to the position of power held by the market actors that dominate the incumbent electricity regime. Hence, the primary objective of this thesis is to discuss how the relationship between the two fundamental actors driving Spain’s energy transition, the political class and three dominant electricity corporations, has influenced energy policy in a way that prevented the shift of Spain’s energy model for the last twenty-five years.

Social forces are defined in this thesis as the organised elements, meaning a group or groups of individuals, representative of different segments of society that share mutual interests connected at the state- and corporate-level. The research focuses on two fundamental social forces that configure the power structure in Spain regarding the energy transition: the state, as the ultimate aggregation of political power, and energy-electricity corporations, as the aggregation of economic power. The politico-institutional forces are mainly composed of the government and state specialised institutions which design the necessary public policy and the regulatory framework driving the development of the energy transition. However, within the large organisation that is the state, some particular institutions play a crucial role in the energy transition. The Ministry of Energy and the Ministry of Economy are two key institutions that coordinate and design energy policy. For instance, while the Ministry of Energy determines grand energy strategy, it is the Ministry of Economy that determines vital elements of it such as the policy instruments to be employed (subsidies or bonuses) and the tax framework (tax incentives

1 The definition of the term energy transition as used in this thesis is discussed more in depth in the next section. However, for clarity on the matter, the basic premise is that it comprehends the process towards a low- or zero-carbon economy that rests upon three key pillars: the hegemony of renewable technologies in the energy supply mix, the deep electrification of the economy (land transport, industry, and heating), and the expansion of energy efficiency.

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or penalties) to bolster the energy transition. In this sense, it is ultimately the political class the actor that in practical terms represents the government and other state institutions. On the market side, the economic forces behind the energy transition aggregate into Spain’s electricity corporations. Due to the current design of the Spanish electricity market and the oligopolistic structure that backbones it, electricity corporations are the key, decisive actors in charge of carrying out the changes outlined by state policy since they are the ones with the technical and financial resources to apply the material change. This thesis takes the three largest corporations that dominate the Spanish electricity market, Endesa, Iberdrola, and Naturgy, as case studies representing economic power. As a result of their dominant market power and ample means, these three corporations play a fundamental role in determining the success or failure of the energy transition in Spain.

This last point is crucial since the energy transition is undoubtedly the process that will transform energy models for the coming future. At present, energy regimes worldwide are at a turning point: climate change, global warming, and environmental degradation, together with the social pressures these phenomena produce, require energy models to transform in the medium-to-long term away from fossil fuels and towards low- or zero-carbon. Therefore, it is of high relevance to better understand how this process works by studying and analysing the actors that promote and resist it, together with the challenges it faces on a country-specific basis. However, as will be further explained afterwards, the energy transition is difficult to analyse because it is a complex, multidimensional, and non-linear process that requires and entails the total transformation of whole energy models. This process involves multiple actors—often with opposing interests—, which act under the different regulatory frameworks under which they operate. On the one hand, the energy transition opens a window of opportunity for energy systems to become more decentralised, less rigid, and more democratic and inclusive. On the other hand, however, the deeply entrenched current energy regimes—based on fossil fuels and nuclear power—actively resist change by making use of a variety of strategies as they simultaneously reposition themselves in order to protect their interests and power. This contestation reveals that the energy transition is indeed economically disruptive, socially conflictive, and—thus—a profoundly political process. However, despite this, the analysis of the energy transition tends to be rather apolitical; the focus is placed on the examination of the socio-technical elements, often overlooking politics, power relations, and distributional matters.

Similarly, much emphasis is placed on the importance of adequate policy for the energy transition to succeed, but not so much interest is devoted to studying how these policies

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reflect or contravene the strategic interests, visions, and approaches of the different actors involved in the process. As previously mentioned, Spain is a country with a vast potential to produce renewable energy due to its geography and climate. However, despite some promising results at the beginning of the century, the transition process has gravely stagnated. It is therefore highly relevant to explore the reasons behind this and more specifically, how the relationship between the political class and the electricity corporations has influenced this condition. This thesis thus answers the following research question:

How has the relationship between the political class and the three dominant electricity corporations (Endesa, Iberdrola, and Naturgy) influenced energy transition policy in Spain from 1994 to 2019 resulting in the country’s failure to achieve a robust shift in its energy model?

The question is two-fold. On the one hand, it aims to correctly identify the relationship between the two main actors behind the energy transition in Spain—the political class and electricity corporations—and to foster an understanding of the interactions between them. On the other hand, the question aims to examine the impact of this relationship on the stagnation of the energy transition process by looking at the influence of elite networks on energy policymaking. At the same time, the chosen time frame is demarcated between 1994 and 2019 for two reasons. Firstly, it was in 1994 that the first significant law on the Regulation of the Electricity System is introduced. This law configured the modern functioning of the Spanish electricity market and opened the door to the promotion of renewable energy technologies with the creation of the so-called ‘special regime’. Secondly, 2019 is the last year this research examines because it is the most recent date for which there is widely available public information. In terms of space delineation, the thesis looks at national elite networks in Spain, with a focus on the top twenty senior members of Spain’s political class and their connections with the three dominant electricity corporations. This focus leaves aside (1) lower-level connections between the actors mentioned above, and (2) connections between the political class and other energy-electricity corporations not considered as well as possible transnational elite networks.

The more three sub-questions will help answer the main research question.

Sub-question 1. How has Spain’s energy mix and energy transition policy developed between 1994 and 2019, and who are the key actors involved in this development?

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The objective of this sub-question is to provide a historical context and to portray the evolution of the energy mix in Spain, the key policies driving the changes in the evolution, and the main actors designing and implementing that policy. This will not only provide a comprehensive contextual picture of the development of the energy transition and its relation to policy but will also identify the specific role played by both actors involved in the process.

Sub-question 2. How are the political class and the three dominant electricity corporations connected, and how do they together form an elite network concerning the energy transition?

Using Social Network Analysis (SNA), and by focusing mainly on the revolving doors phenomenon, the identification and visualisation of the relationship between senior members of the political class and the three dominant electricity corporations map out the configuration of the core alliance between these two actors. At the same time, this identification of these top individuals lying at the junction of the political and economic sphere will guide in answering the following sub-question on the influence of the elite network over policymaking.

Sub-question 3. How does the elite network—consisting of senior members of the political class and the three dominant electricity corporations—influence energy transition policies between 1994 and 2019?

The main idea behind this sub-question is to establish a correlation between the elite network identified in the previous chapter and the influence of the latter on the crucial pieces of energy transition policy. The aim is to discuss the influence mechanisms and strategies of this network over the policymaking process between 1994 and 2019.

1.2 Literature Review

The objective of this section is to briefly discuss the literature that has been produced on the energy transition and to present the ongoing academic debate around it. The study of the energy transition is a relatively recent—albeit fast-growing—field of research, and there is, therefore, a limited number of studies on this phenomenon. At the same time, because the energy transition is a highly complex, dynamic and disputed process that can be studied from multiple levels and perspectives, some investigations focus more on socio-technical aspects. In contrast, others give particular attention to how politics and power dynamics underpin this process. Within this context, in the case of Spain, the

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number of studies focused on the time period of this research (1994-2019) is even more reduced and are most often void of politics.

The term energy transition has become a sort of slogan in recent times: it is persistently repeated in policy documents, journalistic and academic articles, official statements and many other texts that address the energy situation and the challenges faced by today's societies. However, illustrating the complexity and multidimensionality of the issue under question, the degree of precision with which this term is used varies considerably. Fundamental definitions merely describe energy transitions as processes that entail “a shift in the nature or pattern of how energy is utilised within a system” (Araújo, 2014, p.112) or as “the switch from an economic system dependent on one or a series of energy sources and technologies to another” (Fourquet and Pearson, 2012, p.1). Other more comprehensive definitions describe energy transitions as “long-term, multi-dimensional, and fundamental transformation processes through which established socio-technical systems shift to more sustainable modes of [energy] production and consumption” (Markard, Raven and Truffer, 2012, p.956). Nevertheless, it is equally true that there is a common denominator to the different uses of the term: the link between energy policy and the need to tackle climate change. The fundamental aim is that, in addition to being more efficient and promoting social welfare, this transition will vastly reduce greenhouse gas (GHG) emissions, almost eliminating the major sources of pollution that cause global warming (Grubb, Jamasb and Pollitt, 2008). In this sense, highlighting the links between human activities and the natural environment in which society develops, more recent approaches refer to this process as ‘sustainable transition’ or ‘low-carbon transition’ (European Commission, 2018; Keramidas et al., 2020). Therefore, at its core, the basic premise underpinning the current energy transition is that it is a process toward the fundamental transformation of energy systems, from one where fossil fuels are hegemonic, towards a more sustainable and innovative low- or zero-carbon with renewable energies at their core.

Another relevant factor of the current energy transition is the historically unprecedented speed at which the process is evolving since the mid-1990s. In the past, energy transitions between energy sources (from coal to oil, to natural gas) or between types of energy sources (from organic to fossil fuels), have frequently taken hundreds of years to effectively materialise (Unger, 2013; Fourquet and Pearson, 2012). Despite the current energy transition developing faster than previous ones, due to the imperious necessity to tackle climate change, the global energy system must have transformed to low carbon by mid-century (International Renewable Energy Agency, 2019). However, energy

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transitions are uncertain, highly complex, and potentially disruptive processes that entail a structural change in current energy systems worldwide. In this sense, particularly in Western industrialised countries, current energy systems are thoroughly entrenched in the economy, consumption and business models, regulatory frameworks, market designs, transport patterns, and infrastructure networks (Blazquez, Fuentes-Bracamontes and Manzano, 2019). Therefore, the energy transition is a multidimensional process distinguished for having various rationales and levels, and multiple speeds and layers (Sovacool and Geels, 2016). In this sense, such comprehensiveness means that energy transitions are multifaceted and multi-actor processes that involve a “complex interplay among economic, technological, social, and political factors” (Meadowcroft, 2011, p.70). At the same time, it is also true that multiple possible pathways exist for achieving this. While some roadmaps give more importance to ‘alternative energy’ sources such as nuclear power (Nuclear Energy Agency/OECD, 2012), or ‘less polluting’ fossil fuels as natural gas (International Energy Agency, 2019), others place renewable energy technologies as the fundamental pillar of the transformation (International Renewable Energy Agency, 2019; Gielen et at., 2019). For clarity on the matter, in this thesis the term energy transition comprehends the process towards a low- or zero-carbon economy that rests upon three key pillars: the hegemony of renewable technologies in the energy supply mix, the deep electrification of the economy (land transport, industry, heating and other areas), and the expansion of energy efficiency (International Renewable Energy Agency, 2019; Agora Energiewende, 2019). At the same time, it is essential to highlight that, even if these three pillars represent different dimensions of the transition process, they are by no means isolated from one another. Very much on the contrary, these key elements are firmly connected and are mutually reinforcing. For example, the International Renewable Energy Agency (2019, p.23) notes that “electrification, when paired with renewables, goes hand-in-hand with energy efficiency, resulting in lower overall energy demand”, adding that “renewables and energy efficiency, boosted by substantial electrification, can provide over 90% of the necessary reductions in energy-related carbon emissions”. Therefore, arising from the substantial increase in electricity demand from end-use sectors, a robust and “accelerated penetration of electricity uses in the economy” is a core enabling element of the energy transition (Keramidas et al., 2020, p.8). But this deep electrification of end-use sectors ought to be powered by a combination of large-scale expansion of renewable technologies in the power generation mix—particularly solar PV and wind power—and the simultaneous downscaling of polluting fossil fuel sources—such as coal and natural gas power plants, and oil consumption, particularly in transport—. In other

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words, the increase in the electricity share of electricity in primary energy and final demand must come from a ‘cleaner’ generation mix: from energy sources that produce as few as possible or no GHG emissions at all. The European Commission (2018, p.8), in its long-term strategic vision for achieving “carbon neutrality” in the European Union by 2050, also advocates as one of the primary pathways to achieve this goal to “maximise the deployment of renewables and the use of electricity to fully decarbonise Europe’s energy supply”. At the same time, the aim is that the energy transition will not only drastically reduce GHG emissions, but, if properly managed, it will also result in local value creation and deliver significant socio-economic benefits for European businesses, workers, consumers, and citizens (Agora Energiewende, 2019; European Commission, 2018). In sum, the global economy will use less energy per capita or per unit of GDP, and in parallel, the share of energy consumed in the form of electricity (generated by renewable energy technologies) will substantially increase. Likewise, even though the electricity sector is where most progress has been accomplished thus far and where there is more room for decarbonisation, electricity production is often still one of the single most significant contributors to GHG emissions in Spain (Observatorio de la Sostenibilidad, 2019). Overall, the points mentioned above illustrate the crucial importance of electricity systems and show how and why these are the main field where deep transformations ought to take place. In other words, electricity systems2 are the cornerstone of low-carbon energy transitions.

Without doubt, a fundamental transformation that ensures a wide-scale drop in GHG emissions is to be accomplished requires structural change. In this sense, the current energy transition, despite its complexity and multidimensionality, is a process characterised by crucial features; most importantly that it is first and foremost a policy-driven process and that it is highly disruptive for liberalised electricity markets because it undermines its economic rationale (Blazquez, Fuentes-Bracamontes and Manzano, 2019, pp.5-8). Nonetheless, despite being processes that have similar characteristics in common, substantial differences exist between the chosen pathways and methods of each energy transition. Ultimately, therefore, each domestic energy transition will be shaped by its distinct characteristics such as natural endowment factors, political economy, and sociocultural framework (Ćetković and Buzogány, 2016; Sarrica et al., 2016; Palazuelos, 2019; Haas, 2019b). This country-specificity feature also highlights the importance of politics and asymmetrical power relations in shaping and influencing

2 The term electricity system is used in the thesis to refer to the companies, operators and organisations involved in the electricity market as well as the set of infrastructures specifically belonging to that business.

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the energy transition (Bues and Gailing, 2016). Energy transitions are not only socio-technical but also highly political processes, and as such, they affect in various ways “different (networks of) actors (individuals, firms, and other organisations, collective actors) and institutions (societal and technical norms, regulations, standards of good practice), as well as material artifacts and knowledge” (Markard, Raven and Truffer, 2012, p.956). While specific energy transition designs will not challenge the existing power structures and relations of incumbent energy-electricity regimes, others might be more ambitious and disruptive processes where subaltern actors can challenge entrenched interests in newly opened spaces and opportunities (Kubli and Ulli-Beer, 2016). Hence, in this sense, it is essential to recall that energy transitions develop “from social struggles that aim to introduce not only new technologies but also new forms of less hierarchical social orders” (Haas, 2019a, p.72). In this regard, energy transitions are also political projects that should deal with the “problem of how much energy is needed, for what purposes and how it is used” (Sarrica et al., 2016, p.2). Accordingly, it is evident that—despite remaining rather under-theorised—politics and power dynamics heavily underlie energy transitions, whether at a national (Geels, 2014; Bues and Gailing, 2016; Ćetković and Buzogány, 2016; Palazuelos, 2019), regional (Haas, 2019a) or global level (Newell, 2019). Introducing power and power dynamics to the analysis of energy transitions also underlines the disruptive and conflictive nature of these contested processes (Scoones, Leach and Newell, 2015). Therefore, energy transitions are political projects that require effective changes in governance and flexible short- and long-term policies that properly guide and support the process if this is to succeed. In this regard, policies must ensure a balance between long-term planning and adjustability and flexibility on the one hand, and on the other hand, between cost-effectiveness and affordability with ambition and celerity.

As mentioned above, in the case of Spain, not many exhaustive analyses have been conducted on the uneven development of the energy transition, and those that have, have been mainly from a socio-technical perspective (del Río and Mir-Artigues, 2014; Alonso et al., 2016). More recently, however, some more comprehensive reviews have focused more on power, particularly on the strength of the electricity oligopoly to shape the process (Palazuelos, 2019), or conversely on the potential of the energy transition for the democratisation of the Spanish energy system (Capellán-Pérez et al., 2018). Considering the country-specific nature of the energy transition, comparative analysis from a political economy perspective of Spain’s transición energética and Germany’s Energiewende reveals the significant differences between the two processes (Haas, 2019b). Similarly, it also reveals two critical factors shaping the energy transition. First,

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elites and elite networks do play a crucial role in influencing and shaping this process in a multitude of different ways (see Sovacool and Brisbois, 2019). Conversely, an organised and active civil society is a pivotal actor of the political economy of the energy transition, as it plays a role of utmost importance countering elite power, supporting the development of the process, and shaping its nature (see for the Italian case Magnani and Osti, 2016).

Once the literature and debate around the energy transition in Spain have been discussed and reviewed, it is clear that; partly due to the only recent emerging importance of this field of study, and partly due to the focus on the socio-technical aspects of it, a wide gap exists in the literature on how the relationship between political and economic actors shapes the energy transition. Hence, contributing to the growing study of the relevance of studying politics and power dynamics as crucial factors underlying the energy transition, this thesis examines how the relationship between the political class and the three dominant electricity corporations has influenced Spain’s transición energética.

1.3 Theoretical and Conceptual Framework

The effective development and eventual success of the energy transition rely primarily on the interaction between the political actors (the state and other specialised institutions) designing policy and the economic actors (electricity corporations) practically implementing it. It is the mixed cooperation between these two actors that ultimately determine the nature, scope, and speed of each energy transition. Specifically, the relations between the political class and the three dominant electricity corporations, together with the market power that these corporations hold over the State, are critical factors influencing the implementation of the transformations required by the Spanish electricity system. Therefore, this study argues, that in order to analyse the energy transition in Spain it is fundamental to understand the relationship between state and market, or between political class elites as representative of an interest group, and the three dominant corporations of the incumbent electricity regime. This section thus outlines and briefly discusses in three blocks (a, b, c and d) the theoretical approach and concepts that constitute the basis of this research.

(a) State-society-market complex

Cox (1981) focuses his line of thought on the set of intertwines and linkages between the political domain, the economic realm, and the social sphere. The scholar argues that this set of connections constitute what he calls the “state-society complexes”, which

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derive from “the sense of a reciprocal relationship between structure (economic relations) and superstructure (the ethico-political sphere) in Gramsci’s thinking” (Ibid, p.134). This concept of state-society complexes describes a configuration of social forces in an ideal type or a “simplified representation of a complex reality” (Ibid, p.137). Three forces are identified as such: material capabilities, ideas, and institutions, where the “relationships [between them] can be assumed to be reciprocal” (Ibid, p.135). These concepts are not independent of each other but are instead integrated, albeit to different degrees depending on a case-specific basis. Thus, each country will have its specific state-society complex determined by multiple factors such as its political system, economic structure, culture and history.

Picking up this line of thought, Amineh and Guang (2017, p.12) further develop this concept and identify what they define as “state-connected society/market complexes”. These are composed of “self-identifying, state-organised groups that are in continuous interaction with each other at the inter-state and inter-societal levels” (Ibid, p.12). At the same time, these groups possess “order-building and rule-setting capacity” (Ibid, p.12), as national relations between the state and the market “are part of the growth-promoting or growth-restraining institutions in societies” (Ibid, p.12). These scholars discern two “ideal types” of state-society-complexes: ‘liberal’ and ‘authoritarian or centralised’, the embodiment of which are the United States and China, respectively (Ibid, p.12). In the latter, “civil society, based on social classes and forces, especially a business class, is non-existent, underdeveloped, or too weak to act independently of state power”. On the other hand, in the former, in short, “business interests are dominant inputs in the policy-making process, reflected in the “revolving between state and class”” (Ibid, p.13). Significantly, the critical factor to consider here is the “differentiation between those governing and those ruling” (Ibid, p.12). Whereas in China, this differentiation is “relative”, in the US they “are in theory separated” (Ibid, p.12).

Moreover, focusing on the relationship between state and market, in centralised state-society complexes, corporations should be understood as an extension of the state apparatus and power as they are part and parcel of a “centralised system of governance” (Ibid, p.13). Conversely, in liberal state-society complexes, corporations and the business class are in varying degrees autonomous since they “are able, to a certain extent, to operate independently of the state” (Ibid, p.14). Still further, because the state in liberal state-society-market complexes is more structurally dependent on market power, corporate forces and the business class can influence and shape the decision-making process in a more favourable way to their interests. However, once again, these represent ideal models. In practical terms, the relations described above are not static

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but dynamic. Within these ideal types, a broad spectrum of middle-ground cases exists each one of them with its characteristics, nuances and country-specific circumstances.

(b) Spain’s power structure and elite networks

Underlying each specific configuration of the state-society complex are other concepts as power structure and elite networks. On the one hand, a generic definition of power structure could be “the network of people and institutions in the city or nation understudy that stands at the top of the power indicators” (Domhoff, 2009). Power structure research is, therefore “an approach to the study of power that highlights the unequal distribution of resources upon which power is based”, where the importance is placed on the “formal and informal social networks as the means by which power is concentrated and institutionalised” (Burris, 2012). Ultimately, researching a power structure means studying the configuration and concentration of power in any given society by looking at the political class. On the other hand, an elite network is, from a sociological and political science point of view, “a broad, inclusive network of powerful persons with similar social origins, in different institutions” (Moore, 1979, p.673) that conform the power structure of a selected organisation or entity—be that a nation, region or city—. Elite networks are, therefore, a coalition of actors composed by a web of key individuals located at the junction of the political and the economic sphere, and at the core of the decision-making process. This pattern has been widely studied, both at the national (Moore, 1979; Domhoff, 2009) and transnational level (Pijl, 1984; Burris and Staples, 2012; De Graaff, 2017).

Moreover, from a governance point of view, elite networks are established more formally or informally by interacting social forces, in most cases, to pursue common interests. The formation of elite networks is partly explained by the fact that they are platforms that foster the “maintenance of well-oiled communication channels” (Moore, 1979, p.675), as they serve elites a dual and inter-related purpose: class formation and hegemonic control. On the one hand, elite networks support class-formation of the political class as they are vital platforms for “intra-elite cohesion that contribute to shaping joint interests that extend beyond the interests of individual firms” (De Graaff, 2017, p.50). On the other hand, elite networks also play a crucial role in determining the ‘rules of the game’ in any society, and how these reinforce or challenge existing power dynamics (Domhoff, 2009). Against this background, the notion of elite power is also relevant to develop. Power is an inevitably complex and sophisticated concept; it is omnipresent yet often ambiguous, contested and multidimensional. This entanglement is because “power occurs across

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multiple sites of visible and invisible struggle, in all shapes and sizes, from the intimate to the infrastructural, and across micro and macro scales” (Sovacool and Brisbois, 2019, p.8). However, a comprehensive theoretical examination of elite power reveals the complexity and multidimensional character of the issue under question, reflected on how—traditionally—a wide variety of scholars have analysed the concept from different points of view, focusing on some dimensions over others (Ibid, p.5). This work focuses on the notion that power can be consolidated, entrenched, challenged, and redistributed, illustrating how because it “is always a dynamic relationship between entities”, power is ultimately a story about agency and actors (Ibid, p.2). This vision supports the conceptualisation of power in the context of the energy transition as “simultaneously agent centered, corrective, and conduct shaping, as well as structure centered, pervasive, and context shaping” (Ibid, p.2). Most commonly, power has been identified to exist in three different but interconnected dimensions: instrumental, discursive, and ideological power (Lukes, 2005). Similarly, focusing on the relational dimension of power, it is essential to emphasise how “the exercise of power—although it can vary by type and agent—is embedded in a complex network of power relations defined by multiple, interconnecting and circulating forms of power” (Sovacool and Brisbois, 2019, p.2). In order analyse how different actors resist transformation, it is also relevant to discuss how the connections between the political class and corporations influence on policy output.

(c) The core alliance and the historic block

Regarding the power of elite networks in shaping the energy transition, and in an attempt to bring “politics and power into the multi-level perspective” (Geels, 2014, p.21), it has been argued that “policymakers and incumbent firms can be conceptualised as often forming a core alliance at the regime level, oriented towards maintaining the status quo” (Ibid, p.26). A core alliance thus refers to the informal alliance between senior members of the political class and corporations and is useful to represent the ‘top-down’ approach of the energy transition in Spain. This core alliance can be conceptualised in various ways but is ultimately resultant from the mutual dependencies between the political class and corporations, their often-common interest in resisting fundamental change, and the structural power of big corporations in capitalist societies.

At the same time, the core alliance between the political class and corporations, when endowed with enough legitimacy, it can also be conceptualised as what Gramsci described as a historic block: a configuration of the dominant segments in society which crucially “cannot exist without a hegemonic social class” (Cox, 1983, p.168). In terms of incumbent fossil fuel- and nuclear-based energy-electricity regimes, this historic block

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has been conceptualised in several ways. However, a historic block can only effectively take place if the core “alliance between policymakers and business” can also obtain “consensual legitimacy in civil society via widely accepted discourses” (Geels, 2014, p.27). Gramsci’s differentiation “between spontaneous and active consent” also helps understand the role played by civil society in the energy transition and the robustness of the historic block (Haas, 2019b, p.203). More so even in the case of Spain, where Spanish civil society has been identified as having a passive consent for renewable energies and how this effectively meant that the energy transition was an elite-driven process (Ibid, p.206).

(d) The political class and revolving doors

A vital component of the historic block is the political class. This thesis uses the analysis of the Spanish political class provided by Matuschek (2004, p.341), where it has been observed that Spain “constitutes a peculiar case within Western European democracies”. A crucial characteristic is that the political class is in no small extent “a heritage of the Franco era” defined by “an overlap of administrative elite, political class [in the narrow sense meaning professional politicians], and economic executives” (Ibid, p.341). Similarly, ‘partitocracy’ dominates the Spanish political class, as the latter is characterised by the interwovenness and connectedness between the public administration and the two dominant political parties. These features manifest in “significant overlap of different positions and the high fluctuation of professional politicians between positions in the institutional framework” (Ibid, p.349). Therefore, within this thesis, the term political class refers to the individuals that make up the core of the inner political circle, which includes the President and his cabinet, Members of Parliament, high-ranking state officials from the different levels of the Public Administration, and the administrative elite (Ibid, pp.342-343). In Spain, the relationship between the political class and large—electricity—corporations has evolved considerably during the last three decades. However, at its core, the influence of economic forces over political forces is still in no small extent heritage of the functioning and organisation of the Spanish economy during a great part of the 20th century.3 In this sense, the core alliance between the political class and the three electricity corporations expresses the structural and ideological leverage that the market holds over the state. It

3 The large electricity companies acquired a dominant position during the Franco regime when they were part of the business groups that commanded the large banks as the prominent owners of the electricity companies, construction companies and others (see Villena, 2019; Ramiro and González, 2019; Palazuelos, 2019).

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is within this context that the pattern of revolving doors displays the connections of the abovementioned core elite alliance between the political class and corporations. Revolving doors are a mechanism that occurs when crucial individuals with political, regulatory and/or institutional powers pass to occupy prominent positions at corporations (often in the board), to then possibly get back to public office, and vice-versa. Watchdog group Transparency International (2017, p.4) defines these mechanisms as “the movement of individuals between positions of public office and jobs in the same sector in private or nonprofit organisations, in either direction”. Revolving doors are crucial mechanisms enabling the formation of social networks that, through lobbyism activities, effectively enable vested interests to advocate in policymaking for their interests in terms of preferred policies and approaches (Blanes i Vidal, Draca and Fons-Rosen, 2012; Battaglini and Pattachini, 2019). Hence, revolving doors are an essential mechanism connecting the Spanish political class and the corporate community. From this standpoint, conflict-of-interest situations are also important conceptual elements to consider when discussing revolving doors and elite networks. In essence, a conflict of interest is a situation where a conflict exists “between the public duty and private interests of a public official, in which the public official has private-capacity interests which could improperly influence the performance of their official duties and responsibilities” (OECD, 2003, p.24). Similarly, conflict-of-interest situations can be real, apparent or potential (Ibid, p.58). Therefore, from the governance point of view, both revolving doors can have important ethical consequences and repercussions, since they impact—both the perceived and actual—transparency, fairness and integrity of political decisions and policymaking. Revolving doors are thus a mechanism that enables the identification of the relationship between the political class and corporations and are a useful concept to analyse the influence over policymaking.

On that account, this theoretical framework provides this research with a means to connect the socio-political context, the power structure, and the actors behind a complex, profoundly political, and contested process as the energy transition. The abovementioned concepts of state-society complex, elite networks, political class, historic block, and revolving doors are particularly useful to understand how the structural relation between state and market actors effectively skews energy policy in favour of the latter, and how this has directly impacted the energy transition process.

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1.4 Brief Argumentation and Hypotheses

The fact that the Spanish energy model has failed to undergo a resilient shift is not due to natural or technological limitations, nor to a lack of entrepreneurial skills in the renewable energy sector, to cite a few examples. It becomes evident that one of the leading causes behind this lack of success4 in Spain’s energy transition is the close relationship between the political class and the electricity corporations. At least that is how it is perceived by for a large part of the Spanish press and public opinion that often attributes the stagnation of the energy transition particularly to the widespread revolving doors. The common idea is that the boards of these corporations function both as a breeding ground and a golden retreat for the political class5. To ultimately determine how the relationship between both actors has influenced the energy transition in Spain between 1994 and 2019, this thesis focuses on the elite network of senior individuals that lie at the junction between the economic and the political sphere, and how they influence energy transition policymaking.

Due to the transformative and disruptive nature of the energy transition, some actors might support and reinforce the process, while others will obstruct it and actively resist change. For instance, the corporations of the incumbent en energy regime view the process as a direct challenge to their interests and the underlying power dynamics derived from their market power. In this regard, the resistance and opposition to the large-scale expansion of renewables by existing fossil fuel and nuclear energy-electricity regimes can take various forms, with incumbent actors actively resorting to power to fight-back against fundamental change (Geels, 2014; Newell, 2019; Sovacool and Brisbois, 2019). This exemplifies how the energy transition is another field of politics where actors interact and compete in multiple ways to secure their contradicting interests. Critical theory is thus instrumental because it combines the study of political and economic dimensions and is very suitable to identify and examine the power dynamics in the energy transition. It also fits for analysing the role of the State vis-à-vis other important forces—like corporations—and the relation of elite networks to prevailing social and economic structures.

4 Lack of success is understood as the inability to produce a robust and long-lasting shift of Spain’s electricity model that displaces fossil fuels and nuclear energy, while simultaneously placing renewable energy technologies as the cornerstone of the energy system.

5 The extensive set of relations between political elites and corporations also include big banks, construction companies, law firms, and consultancies (Ramiro and González, 2019).

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Against this background, the resilience and position of power exercised by the three private transnational corporations—Endesa, Iberdrola, and Naturgy—that dominate the Spanish electricity system becomes a significant determinant element of the possibilities and limits of the energy transition in Spain (Palazuelos, 2019). Ultimately, this position of power enjoyed by these three corporations can only be counterbalanced by the aggregated political power of public authorities; mainly the government and other state institutions. It is thus the interaction between these two actors, the state and the dominant electricity corporations, that ultimately sets the dynamics that determine the nature of the transition process, its speed, and its success or failure. Most relevantly, at the junction between the political and economic sphere lies the elite network of senior members of the Spanish political class connected with the three dominant electricity corporations of the incumbent fossil fuel- and nuclear-based electricity regime.

Within this context, a core alliance or between the political class and corporations of the incumbent energy-electricity regime representing the ‘top-down’ approach to the energy transition in Spain arises aiming to ensure that the this is a market-led process that does not substantially challenge the status quo. If the core alliance enjoys consensual legitimacy or at least passive dissent, which in the case of Spain it does, then it can also be interpreted as a historic block aimed for safeguarding current power dynamics. Critical theory is thus a school of thought that provides a comprehensive, precise, and dynamic understanding of reality and is thus capable of better adapting to changing material realities. Concepts like state-society complex, elite networks, power structure, and historic block, allow this thesis to (re)politicise the study of the energy transition by examining how power and power relations are crucial factors shaping the relationship between the political class and the three dominant electricity corporations, or in other words, between state and market. It also allows for the identification of the configuration of the structures and mechanisms that elite networks instrumentalise to safeguard the status quo.

The thesis thus identifies the core alliance between the political class and electricity corporations, by visualising the elite network of senior policymakers that are connected to the three dominant electricity corporations (Endesa, Iberdrola, and Naturgy) mainly via revolving doors. This then enables the research to examine the possible correlation between the core alliance and energy policy, with the final aim of discussing the influence on the stagnation of the energy transition. To test if this is the case, the following set of hypotheses has been produced:

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H1: The close connections via revolving doors between the senior members of the political class (former Presidents, Ministers, and other high-ranking state officials) and the three dominant electricity corporations (Endesa, Iberdrola and Naturgy) in Spain is the main reason behind the stagnation of the energy transition.

H1-0: The close connections via revolving doors between the senior members of the political class (former Presidents, Ministers, and other high-ranking state officials) and the three dominant electricity corporations (Endesa, Iberdrola and Naturgy) in Spain is not the main reason behind the stagnation of the energy transition.

H2: The fact that Spain has failed to shift its energy model is due to a lack of political will on the part of those who legislate, as a result of the high-level connections between senior members of the political class (former Presidents, Ministers, and other high-ranking state officials) and the three dominant electricity corporations (Endesa, Iberdrola and Naturgy).

H2-0: The fact that Spain failed to shift its energy model is not due to a lack of political will on the part of those who legislate, as a result of the high-level connections between senior members of the political class (former Presidents, Ministers, and other high-ranking state officials) and the three dominant electricity corporations (Endesa, Iberdrola and Naturgy).

Both sets of hypotheses emphasise the premise that the impact of the high-level connections between senior members of the political class and the three dominant electricity corporations are a significant reason behind the stagnation of the energy transition and its failure thus far to erode the resilience of the

1.5 Method and Data

The unit of analysis of this study is the relationship between the Spanish political class and three dominant electricity corporations, or in other words, the relation between the state and market. The following empirical examination thus looks at the configuration of the elite network between the two actors leading the energy transition: the political class and Spain’s three dominant electricity corporations, Endesa, Iberdrola, and Naturgy, from 1994 to 2019. For this, a Social Network Analysis (SNA) is utilised in a simple, explanatory way to map out the top twenty personal connections between the two actors. Specifically, it mainly looks at how revolving doors serve as a mechanism connecting senior policymakers to each of the three selected corporations and also visualises

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personal and/or professional connections among individuals (see Figure 3.1). In this sense, this is a different approach to other cases where the SNA is most commonly used to look at the elite networks and the configuration of power structures established by the business practice of interlocking directorates.

Rather, this thesis focuses on the so-called ‘core alliance’6 (Geels, 2014) established by the elite network of senior members of the Spanish political class and the three dominant electricity corporations and examines how it has influenced energy transition policy, and how it relates to the concrete materialisation of the state-society complex in Spain. The focus on the core alliance implies mapping via the SNA the rotation between public office and the private sector of the most senior members of the political class (former Presidents, Ministers, and State Secretaries) and mainly the board of Endesa, Iberdrola, and Naturgy. Here, the deductive character of this part of the research becomes clear, as it elaborates a pattern of connections among individuals and between individuals and each corporation. In this sense, the SNA is useful as it maps out the connections between actors without inferring, but instead merely describing and plotting the network. The added value of this approach is that it places the focus on the informal coalition of actors that form the core alliance influencing policymaking. The SNA does not include other lower-level connections of members of the political class and the three selected corporations or connections to other energy-electricity corporations.

The data for the SNA originates from three sources: (1) two reports on the revolving doors on Spain’s energy sector (La Marea, 2018; Greenpeace, 2013), (2) the thorough review of the Spanish press, and (3) the consultation of the Annual Corporate Reports of Endesa (2007; 2011) and Iberdrola (2018a; 2018b; 2019). Additionally, Villena’s (2019) book on power networks in Spain also provides some critical insight into the connections between specific individuals and some of the selected corporations. This first step is essential before introducing qualitative analysis methods.

Only after the SNA has mapped out the connections and the patterns are visualised, it is possible to introduce the interpretation of qualitative methods. Two semi-structured interviews were conducted in mid-April via telephone and email with two senior experts with an academic background and in-depth knowledge on the functioning—at the technical and political level—of the Spanish electricity system and the development of

6 A core alliance, as previously explained, refers to the informal alliance between senior members of the political class and corporations and represents the ‘top-down’ approach of the energy transition in Spain. A critical factor of this core alliance is that it is oriented towards safeguarding current power dynamics, ultimately aiming to preserve the status quo.

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the energy transition. The essential advantage of introducing qualitative analysis is that it analyses and evaluates the mapping via the SNA of the network. The two interviews provide rich data and understanding that further contributes to the identification of nuance, additional topics and themes, as well as examining the policy relevance of the connections and the nature of the elite network previously mapped out. Chapter 4 thus uses primary data sources to understand better how the core alliance between senior policymakers of the Spanish political class and the three electricity corporations has influenced the decision- and policy-making process in terms of the energy transition. The data used in this thesis comes from both primary and secondary sources. In the first place, data used for Chapter 2, which provides background and serves as a basis for the following chapters, is extracted from the latest official book on the Energy in Spain (MITECO, 2017), the latest renewable energies report by Red Eléctrica de España (REE, 2018), the two available IEA/OECD's Spain reports (2009; 2015), Eurostat (2020a; 2020b), and policy papers (IDAE, 1999; 2005).

More generally, the most important secondary sources that have not yet been mentioned include various books (Velasco, 2015; Villena, 2019) and book chapters (Amineh and Guang, 2017), peer-reviewed articles (Cox, 1981; Geels, 2014; Haas, 2019a; Haas, 2019b; Newell, 2019; Sovacool and Brisbois, 2019) and articles from the Spanish press. Most notably, Palazuelos (2019) has provided invaluable insight. The book offers a critical and very didactic—yet comprehensive—approach to such a complicated topic as the functioning of the Spanish electricity system, the involvement of the relevant actors, and the consequences this has for the energy transition. In this sense, it has undoubtedly been the single most important source of secondary data and has been widely used.

1.6 Organisation of the Research

This research is structured as follows. Firstly, Chapter 1 has served as an overall introduction to this thesis; presenting the focus and objectives, the theoretical and conceptual framework, the literature review, and a discussion of the methodology and data employed.

Chapter 2 provides a robust picture of the energy structure in Spain and connects its development with the energy transition policy. At the same time, the chapter discusses the two main actors behind the energy transition: the state and the dominant electricity corporations. The chapter provides a solid background that serves as a basis for the coming chapters.

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Chapter 3 uses Social Network Analysis (SNA) to map out and visualise the core alliance—of senior members of the political class and the three dominant electricity corporations—representing the ‘top-down’ approach to the energy in Spain. In this sense, this chapter mostly serves as a basis for the next chapter, where the impact of the SNA is discussed vis-a-vis energy transition policy.

Chapter 4 is the most crucial chapter of the thesis. It analyses the correlations between the core alliance between senior members of the political class and electricity corporations and the critical pieces of energy transition policy. Similarly, the structural power of the electricity corporations and the strategies and manoeuvres used by these actors to exert political influence over policy are discussed.

Finally, chapter 5 is the final chapter of the thesis. It recapitulates the main points, presents the key findings and conclusions, and discusses the relevance and contribution of the research. Towards the end, the chapter acknowledges some weak points of the thesis and hints at possible further research to carry out.

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Chapter 2: Spain: Energy Structure, Policy and Actors

between 1994 and 2019

2.1 Introduction

The focus of this chapter is the interconnection between Spain's energy structure, energy transition policy, and the two main actors involved in the creation and implementation of this policy from 1994 to 2019. Thus, the primary objective is to provide a robust picture of the evolution of the energy mix in Spain during the last 25 years and to give an overview of the two main involved actors in the elaboration and implementation of energy policy: the state and the electricity corporations.

The sub-question to be answered in this chapter is the following: How has Spain’s energy mix and energy transition policy developed between 1994 and 2019, and who are the key actors involved in this development?

The data used in this chapter comes from primary sources like Eurostat (2020a; 2020b), the latest official book on the Energy in Spain (MITECO, 2017), the latest official report on renewable energies in Spain by Red Eléctrica de España (REE, 2018), the two available IEA/OECD country reports on Spain (2009 and 2015). Similarly, the examination of several specific policies and governmental plans is also carried out (IDAE, 1999; IDAE, 2005). At the same time, another crucial secondary data source is Palazuelos' (2019) book on the Spanish electricity oligopoly.

The chapter is structured as follows. Three more sections follow this introduction. Firstly, Section 2.2 discusses Spain's energy mix and its evolution; including domestic resources, production, consumption (sub-section 2.2.1), the evolution of the electricity mix (sub-section 2.2.2), and net imports (sub-section 2.2.3). Moreover, for the purpose of linking state and market, Section 2.3 examines Spain's energy—transition—policy and the two key involved actors. On the one hand, sub-section 2.3.1 focuses on the actor designing policy, the state—and related institutions—. On the other hand, sub-section 2.3.2 looks at the electricity corporations. Finally, Section 2.4 discusses the conclusions and grounds of the chapter.

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2.2 The Energy Structure of Spain

2.2.1 Domestic resources, production, and consumption

Spain is an extremely energy deficit country: indigenous oil and natural gas resources are negligible, and coal resources, even if higher compared to other fossil fuels, are still few and expensive. Minor oil and natural gas deposits were discovered in several fields on land and at sea, the first of which was in 1964. However, domestic production of crude oil and natural gas currently represents only 0.5% of primary energy demand (Instituto Nacional de Estadística, 2018, p.38). Regarding domestic coal resources and production, two main facts illustrate the situation. First, from reaching a record high of 40 million tonnes (Mt) in 1986, the level of domestic coal production plummeted to less than 2 (Mt) in 2016. Second, compared to covering almost all the national demand for coal in the 1980s, the growth in imports during the last three decades has led to domestic coal accounting for just 14% of the total coal needs in 2017 (Palazuelos, 2019, p.61). The historical lack of domestic resources has coincided with a period of enormous economic growth and energy consumption during the last twenty-five years.

Notably, according to data from the International Energy Agency (IEA), during the economic boom, from the year 2000 until the outbreak of the 2008 financial crisis, the Spanish economy grew an average of 30%, well above the Organisation for Economic Co-operation and Development (OECD) average of less than 20% (IEA/OECD, 2015, p.15). This period of immense economic growth translated into primary energy demand soaring, reaching its peak in 2007 and hitting the figure of 147.359 thousand tonnes of oil equivalent (Ktoe). With the aftermath of the 2008 financial crisis affecting the Spanish economy especially hard, by 2014, primary energy demand economic activity gradually recovering from the effects of the crisis, and even though still far away from pre-2008 levels, the latest data reveals that primary energy consumption further increased to 130,739 Ktoe in 2017 (Figure 2.1). The evolution of primary energy consumption in Spain from 1990 to 2017, therefore, most importantly reveals 2008 as the peak year of consumption, with a substantial decrease—despite some ups and downs—ever since. Within this context, the contribution of each of the different sources displays the slight decrease in the use of oil and coal, the steadiness of nuclear and hydropower, the growth of natural gas, and the irruption of renewable energy technologies (RET) as solar PV and wind power (Figure 2.2).

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Figure 2.1 Sankey Diagram of energy in Spain in 2017, with figures in Ktoe and where renewables include renewable energy and waste.

Source: MITECO, 2017, p.25 [translated by author].

Figure 2.2 Evolution and breakdown of primary energy consumption in Spain from 1990 to 2017.

Source: MITECO, 2017, p.27 [translated by author].

The breakdown of primary energy consumption in Spain in 2017 illustrates the continued supremacy of fossil fuels (Figure 2.2). Oil continues to dominate (accounting for 44% of

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