Santiago Bañales has been Managing Director of Iberdrola Innovation Middle East (ME), Iberdrola’s global development center of digital solutions for the energy industry, since 2016.
He has 25 years of energy industry experience fulfilling executive roles in R&D, Product Development, Management Consulting, M&A, General Management, and Board Directorships.
Previous to his current role, Santiago was CEO of Ormazabal Current, a global smart grids product manufacturing with facilities in the US, Switzerland, and Spain.
Santiago holds an MSc in Technology and Policy from MIT, a Dual Engineering degree from Ecole Centrale Paris and Universidad Politécnica de Madrid, and an INSEAD International Board Director certification.
Leveraging new technologies, such as artificial intelligence and edge and cloud computing, we not only enhance our global operations but also contribute locally to the energy transitionSantiago Bañales
The world is currently undergoing a significant energy transition. From your perspective, could you outline the key global trends shaping this transition, and how Iberdrola is strategically positioned within this evolving landscape?
Santiago Bañales López: There is a widely acknowledged consensus among global institutions, governments, and companies about what needs to be done. This global plan to achieve zero emissions by 2050 has been widely discussed during COP28 in Dubai. Why net zero emissions in 2050? Because this is the way to keep the temperature under 1.5 degrees, as agreed upon in the Paris conference.
There are three key lines of action that we must consider to achieve the ultimate goal of net zero by 2050. The first one is scaling up investment in renewable energy by a factor of three. Currently, the global investment in renewable energy is between 300 and 400GW, a substantial amount. While we should take pride in this, we need to triple this investment to reach around 1000GW per year and attain approximately 11,000 to 12,000GW of renewable energy by 2030.
We have invested over €150 billion in the energy transition over the last two decadesSantiago Bañales
The second trend is the electrification of demand. It means that you can build a lot of renewables, but if the final energy demand is not based on electricity, you cannot electrify or decarbonize the whole system. Presently, around 20% of global energy demand is electrified. By 2050, the goal is to achieve around 70% electrification in the final energy demand, plus an additional 15% through indirect electrification. This includes electrification in transport, heating in buildings, and industry, while the remaining 15% involves hard-to-electrify sectors that can be addressed through green hydrogen. This involves producing hydrogen with green electricity and then using it in industrial processes such as the production of ammonia, methanol, or green steel.
The third key aspect is investment in electrical networks because you have to connect the renewable generation to an increasingly electrified and digitalized demand. For that, you need smart electrical grids, a critical but often overlooked aspect of the energy transition. Our estimate, aligned with global agencies, suggests that you need to invest roughly the same amount in renewables as in networks to make the energy transition possible. These networks must be smart and digitalized. We are talking overall about an average investment of $3 trillion per year in energy transition until 2050, with some peaks reaching around $4.5 trillion. But it is a $3 trillion investment for these three lines of action: renewables, electrification of demand, and networks.
Iberdrola has been one of the leading companies in this process for the past 20 years. We have invested over €150 billion in the energy transition over the last two decades. In our current investment plan, we are allocating around €47 billion, primarily to networks and renewables. We are actively driving this agenda by investing in all the countries where we operate.
GCC countries have been actively involved in energy-related initiatives. How would you describe the role of GCC countries in the global energy transition, and specifically, what initiatives has Qatar undertaken to contribute to sustainable energy practices?
Santiago Bañales López: The GCC, and Qatar in particular, have made significant strides in the energy transition. If we look at the three key aspects I mentioned—investment in renewables, smart electrical networks, and electrification of demand — there has been substantial investment and ambitious plans for further development. In Qatar, for instance, the construction of an 800MW solar plant, one of the world’s largest, has been completed. Qatar aims to achieve 20% renewable energy by 2030, approximately 2.5GW, which is impressive given its historical reliance on natural gas. Diversification in energy supply is happening rapidly.
In the realm of energy transition, the landscape is rich with numerous opportunitiesSantiago Bañales
Additionally, there has been a considerable emphasis on digitalization in the network sector, with the deployment of smart meters countrywide. In terms of electrification, progress has been made, particularly in plans to electrify transportation. Qatar envisions 100% of public transport and around 25% of the private fleet to be electrified by 2030, supported by a deployment of about 150 rapid charging stations already underway.
A key challenge for GCC countries is a further electrification of demand, in particular industrial demand. As mentioned before, electrification has three primary aspects: transport, heating, and industry. Transport electrification is crucial, considering that only 1% of global energy demand for transport is currently electrified. Global efforts must be undertaken to deploy electrical vehicles, both in GCC and worldwide. The second aspect, heating, is not a significant concern for Qatar, but it is vital in regions like Europe and the US. The third aspect, which is critical for Qatar given its heavy industrialization, involves a comprehensive plan to decarbonize industrial processes. This is challenging, as many industrial processes are not easily electrifiable. It is in this difficult-to-electrify process that zero-emissions hydrogen will play a crucial role.
Zero-emissions hydrogen production can facilitate the decarbonization of critical industrial processes, such as ammonia production, essential for fertilizers. Qatar, being a major ammonia producer, is already planning the construction of a large blue hydrogen plant, using natural gas as a primary source and capturing the CO2 emissions generated by this process for storage or re-utilization in other processes. GCC countries are also well-positioned to generate zero-emissions green hydrogen using renewable energy due to the abundance of low-cost renewable energy and the regional role of the region as logistic hubs to export green hydrogen derivatives. This presents a significant opportunity for a comprehensive plan to produce green derivatives of industrial products like ammonia and methanol, not only for internal use but also for export.
Qatar, being a major ammonia producer, is already planning the construction of a large blue hydrogen plantSantiago Bañales
What strategies or initiatives do you think are essential to encourage and support entrepreneurs entering the renewable energy market? Moreover, are there specific niche areas within the broader energy sector where you see untapped opportunities for entrepreneurs to make significant contributions?
Santiago Bañales López: In the realm of energy transition, the landscape is rich with numerous opportunities. From a technological standpoint, two areas stand out. While we have existing green technologies ready for deployment, there is ample room for innovation, particularly in the reduction of the cost of renewable energy and also electrical storage.
One specific area I find promising, aligning with our focus here in Qatar, is how digital technologies and artificial intelligence (AI) can play a crucial role in the energy transition. Digital technologies may contribute to the energy transition in three primary ways.
First, by enhancing the productivity of renewable energy and network assets. Our renewable generation and network assets are monitored and digitalized, capturing a large amount of data that is used to improve the operation and maintenance processes of these assets. Second, digital technologies help maintain the needed continuous balance between energy supply and demand, a critical factor given the intermittency associated with renewable energy generation. The ability to manage electricity demand and generation in real-time is critical to the functioning of the electrical system, and digital technologies are instrumental in achieving this.
The ability to manage electricity demand and generation in real-time is critical to the functioning of the electrical system, and digital technologies are instrumental in achieving thisSantiago Bañales
Lastly, digital technologies are invaluable in assisting end consumers, like you and me, who may have electric vehicles, heat pumps, water heaters, air conditioning, and solar panels at home. Managing these assets efficiently, saving energy, and contributing to the overall system requires sophisticated solutions that are facilitated by digital technologies.
I believe that another area ripe with opportunities lies in the evolution of new business models for energy. The traditional model dominated by large companies is evolving. Now, with more actors entering the scene, there are increased opportunities for end customers to actively participate in the energy transition. Innovating in these emerging business models is not only currently significant but will remain crucial in the future. I encourage Qatar and other nations to explore these diverse opportunities, positioning themselves as innovative contributors to the global energy transition.
Iberdrola has integrated the UN’s Sustainable Development Goals into its business strategy. Could you share examples of how Iberdrola, through its initiatives and projects, contributes to the broader sustainability agenda beyond clean energy production?
Santiago Bañales López: We have laid out a comprehensive plan for this purpose. To start, on our group dashboard, we have incorporated over 40 indicators that align with the Sustainable Development Goals. You can find all these metrics in our integrated annual report, demonstrating our commitment not just to monitoring financial performance but also to environmental aspects, human quality, and more. These indicators span a range of areas, including environmental protection, society impact, sound governance, and sustainable finance. Now, delving into our plan and how these indicators fit into a global framework, we have three key pillars.
The first is the Climate Action Plan, as previously mentioned, focused on achieving 100% renewable energy in our portfolio by 2030 (we are currently at 70%). It is not just about renewable energy; it also involves exclusively working with green suppliers throughout our entire value chain. Additionally, we are aiding our customers in decarbonizing, emphasizing the electrification of demand. So, climate action encompasses renewables, green suppliers, and customer support.
We are actively working to decrease the use of raw materials like fossil fuels and water in our operations by 50% by 2030Santiago Bañales
Moving on, our second plan centres around biodiversity. We aim to have a net positive impact on biodiversity for all our projects by 2030. This entails close collaboration with local communities to understand and address the impact of each project. We plan to achieve a no-deforestation goal by 2025, including a program to plant 1 million trees, actively working to combat global deforestation.
Lastly, the third pillar focuses on the circular economy. This means setting clear goals, such as achieving 100% recycling of all materials, including solar panels and wind blades decommissioned by 2030. We are actively working to decrease the use of raw materials like fossil fuels and water in our operations by 50% by 2030. As a concrete step, we have established a new company dedicated to recycling blades in Spain, recognizing the growing importance of recycling in the energy sector and the potential for new business ideas in this domain. These three pillars represent the core of our sustainability efforts.