Problem

Spain has committed to phasing out all coal-fired power plants by 2030, a sector that directly employed ~3,000 people as recently as 2018. The closure of coal plants, while critical for reducing greenhouse gas emissions, poses significant socio-economic challenges for regions heavily reliant on coal for jobs and economic activity. Without targeted interventions, Spain's transition to renewables risks exacerbating unemployment and economic decline in coal-dependent regions, such as Aragón, Teruel and other rural areas already facing depopulation. As the energy transition accelerates, grid operators are also struggling to connect the rapid increase in renewable projects seeking grid access, creating a bottleneck for the renewable energy rollout.

Response

To address these challenges, Spain’s Just Transition Institute (ITJ) developed a tender system that links companies' grid access for renewable energy projects to the creation of participatory social-environmental programs with the intention of having those shaped by local needs. The winning bid for the first tender was made by Endesa, an electricity utility company. It was made after the closure of the coal power plant in the city of Teruel and includes developing 14 wind and solar plants while creating 380 direct jobs and nearly 6,000 indirect jobs, with 10% of positions reserved for former coal workers and 25% for women. The company is reportedly providing 337,650 hours of training for 1,300 participants, focusing on renewable energy and organic farming. To ensure the initiatives are community-driven and sustainable, Endesa states it has partnered with over 30 local entities, including businesses, NGOs, and governments. Additionally, Endesa is investing €60 million in social and environmental initiatives, such as olive tree recovery, beekeeping, sustainable tourism, and renewable energy systems for local energy communities. 

The ITJ is now refining the process and expanding it to other regions, with four additional tenders already in progress.

Find out more: Just Transitions Finance Lab