The lack of high-quality fossil fuels in Andalusia has led to a strong dependency on petroleum imports. Still, Andalusia has a strong potential for the development of renewable energy, above all wind energy. The Andalusian Energy Agency established in 2005 by the autonomous government, is a new governmental organ charged with the development of energy policy and provision of a sufficient supply of energy for the community.

The infrastructure for production of electricity consists of eight large thermal power stations, more than 70 hydroelectric power plants, two wind farms, and 14 major cogeneration facilities. Historically, the largest Andalusian business in this sector was the Compañía Sevillana de Electricidad, founded in 1894, absorbed into Endesa in 1996. The Solar power tower PS10 was built by the Andalusian firm Abengoa in Sanlúcar la Mayor in the province of Seville, and began operating in March 2007. It is the largest existing solar power facility in Europe. Smaller solar power stations, also recent, exist at Cúllar and Galera, Granada, inaugurated by Geosol and Caja Granada. Two more large thermosolar facilities, Andasol I y II, planned at Hoya de Guadix in the province of Granada are expected to supply electricity to half a million households. The Plataforma Solar de Almería (PSA) in the Tabernas Desert is an important center for the exploration of the solar energy.

The largest wind power firm in the region is the Sociedad Eólica de Andalucía, formed by the merger of Planta Eólica del Sur S.A. and Energía Eólica del Estrecho S.A.

The Medgaz gas pipeline directly connects the Algerian town of Béni Saf to Almería.