A set of Directives and official documents aim to reorient European policy strategies in the energy sector. However, certain socioeconomic and institutional factors prevent Spain from attaining the interrelated goals set up in those documents (namely, energy liberalisation, reduction of CO2 emissions and promotion of renewable energy). These objectives are difficult to achieve in an institutional setting, such as the Spanish one, characterised by different administrative levels (national and regional). Competencies and initiatives taken in CO2 emission mitigation through RE deployment are scattered around those government levels and lack of coordination between such administrative levels seems to be a main feature. In other words, the combined attainment of those objectives requires that policy makers coordinate local, institutional and public initiatives and examine their feasibility. This paper explores the main imbalances and coordination problems at the territorial and sector levels concerning the complex relationship between energy (production and consumption) and sustainability in Spain. From the analysis of these issues, relevant policy implications can be inferred. (C) 2002 Elsevier Ltd. All rights reserved.