Could a change of government in Spain have big implications on energy policy?

Investing.com -- Spain’s upcoming general election could reshape the country’s energy policies, creating opportunities and risks for utility companies, according to Goldman Sachs.

In an October 6 report, Goldman Sachs said a potential government led by the centre-right People’s Party (PP) could introduce more market-friendly energy policies, including greater support for nuclear power, renewable energy and data centre development.

Spain’s general election is scheduled for November 29, having been brought forward from August 2027. Polls cited by the bank suggest PP could emerge as the largest parliamentary group.

Goldman expects electrification and renewable energy investment to continue regardless of the election outcome, supported by energy security priorities and favourable economics.

Solar power combined with storage costs approximately €60-70 per megawatt-hour, making it more competitive than gas, according to the bank.

A change in government could also ease proposed restrictions requiring new data centres to secure renewable electricity covering 80% of their hourly energy needs.

Goldman identified Buy-rated Solaria as a potential beneficiary of increased data centre investment.

Nuclear operators could also benefit, with PP and Vox previously supporting extensions to existing reactors.

Goldman estimates longer operating lives could generate an additional €500 million to €750 million in annual EBITDA for each of Endesa and Iberdrola, depending on electricity prices.

Retail electricity margins present a potential downside risk.

A 10%-20% reduction in retail margins could lower annual pre-tax profits at Endesa and Iberdrola by €120 million to €240 million each, according to Goldman.

That would translate into estimated 2027 earnings-per-share reductions of approximately 7% for Endesa and 2% for Iberdrola.

The bank also warned that a government transition could further delay hydrogen infrastructure investments, creating uncertainty for Sell-rated Enagas.

Goldman expects the overall impact on most Spanish utilities to be neutral to positive, although detailed party manifestos have yet to be published.