The energy sector is one of the most significant contributors to greenhouse gas generation, making using renewable resources in energy production essential to advancing the fight against climate change. However, renewables reduce atmospheric emissions and decrease energy dependence, ensuring a local and secure supply. Therefore, it is unsurprising that Spain has strengthened its position in this field in recent years, establishing itself as one of the world’s 15 largest clean energy consumers.

As of December 31, 2023, the total installed electricity generation capacity in Spain, according to the national electricity system operator Red Eléctrica, is 125,000 MW, of which 70,000 MW are from renewable sources.

However, renewable energy consumption within Spanish borders currently stands at around one exajoule, corresponding to about 22% of the gross final energy consumption.

This is due to the gap between its production and consumption, with the capacity to “store” this energy being one of its main challenges remaining to be solved today.

It can be said without a doubt that the 2023 figures for the Spanish electricity system demonstrate that Spain has consolidated its renewable leadership. 2023 will be remembered as the year with all-time highs in renewable generation. For the first time in history, more than half of the energy mix (50.3%) originated from resources such as wind, solar, or water. Additionally, 2023 has been the year with the lowest CO2 equivalent emissions (greenhouse gases).

The prospects for electricity generation by 2030 are promising. The revision of the PNIEC (National Integrated Energy and Climate Plan) 2023-2030 proposes installing more than 100,000 MW of additional renewable energy within seven years. This would double Spain’s current installed capacity. (According to data from the System Operator at the end of 2022, Spain’s national installed electrical capacity was 119,200 MW).

This goal demonstrates a clear commitment by the Spanish government to accelerate the transition to cleaner and more sustainable sources, aligning with international efforts to mitigate climate change. The Ministry for the Ecological Transition and the Demographic Challenge published a revision of the National Integrated Energy and Climate Plan (PNIEC) for 2030. This plan includes measures to Increase the share of renewables to 48% of final consumption, requiring 81% of electricity to be generated with renewable energy by 2030.

However, to improve these prospects, the government’s Energy Self-Consumption Roadmap should be reviewed; it was launched late (2022) and with very little ambition. A significant error was locating renewable energy parks (wind and solar photovoltaic) in agricultural areas far from high-demand points, generating strong opposition from rural inhabitants.

Additionally, the targets have been unambitious. The Institute for Energy Diversification and Saving (Ministry for the Ecological Transition and the Demographic Challenge) estimated that 2021 “self-consumption could reach between 9,000 megawatts and 14,000 megawatts of installed capacity by 2030. The reality is that since 2018, when the so-called ‘sun tax’ that harmed the development of photovoltaic energy in the country was abolished, self-consumption in Spain has multiplied by 2.5, reaching almost 600 megawatts installed during 2020, and for 2021, the Institute predicted an increase of approximately 1,000 megawatts, with a total accumulated of 2,500 megawatts.” Just a year and a half later, we are already at 5,200 megawatts, and if the current pace continues, by 2026, we will have surpassed the 2030 targets (between 9,000 and 14,000 MW), which was considered an unlikely scenario.

This Roadmap, therefore, has some serious deficiencies and needs new drivers to accelerate and avoid certain natural and especially regulatory and legislative fluctuations. Self-consumption has emerged as one of the key elements for the medium-term introduction of new supply-demand models. It must be emphasized that self-consumption includes not only the electrical component but also thermal demand (which globally is twice as large); all of this, seeking in the residential sector and small and medium-sized enterprises (SMEs) a direct reduction in energy prices by investing in renewables: photovoltaic, the most visible, without forgetting low and medium-temperature solar thermal, biomass, or geothermal.

In the PNIEC review debates, it has been emphasized to respect the order of the steps: savings, efficiency, and renewables. In the final two steps, seek to flex demand to help and accompany the strong growth of non-manageable renewables at the current stage to allow their integration. Finally, the bottom line is electrifying and decarbonizing with renewables to achieve the environmental goals of reducing emissions by 55%.

Therefore, to boost self-consumption, some actions are proposed to ensure market growth and a sectoral environment, with guarantees for investors who ultimately bear the risk. Thus, in terms of electrical self-consumption, mainly photovoltaic but also extending to mixed wind-solar systems, solar thermal, and biomass, the review of the National Integrated Energy and Climate Plan should quantify self-consumption broadly by technologies to consolidate an adequate legislative and regulatory context; and this, in global quantities and the number of installations, as the number is significant. They are reviewing the application of new public financial resources: subsidies, soft loans, tax exemptions, etc., avoiding a gap and comparative injustice regarding the first cycle of the National Integrated Energy and Climate Plan. And, of course, dispelling the temptation to create new taxes, given the emergence of an economic activity considered lucrative in many forums and not an investment with a transversal public benefit to be incentivized from the public sector. In short, the participation of society in the general fulfillment of Sustainable Development Goals should be promoted, and Spain should truly become a country of self-consumption (Juan A. Avellaner, Industrial Engineer, and Fernando Prieto, Doctor in Ecology, Sustainability Observatory).

Despite these pending challenges, the renewable energy sector in Spain presents substantial opportunities for growth and development. The transition to renewable energies will help mitigate climate change and generate employment, provide an economic opportunity, and foster innovation and research in the sector.

Although significant technical challenges remain for the efficient and effective implementation of renewable energies, with the main one being the search for “efficient storage” of generated energy until its later consumption, Spain has a competitive advantage in renewable electricity generation compared to other European countries. This is primarily because, being a peninsula in southern Europe, it has more hours of sunlight and wind resources than other European countries, allowing installations to operate for more hours and be more profitable. As a result, having abundant renewable energy generation would reduce the price of the electricity market, an advantage that the country’s industry should leverage and which should be an attractive factor for attracting investments to Spain. Investments related to the energy transition (such as battery factories, hydrogen generation, solar panel manufacturing) or innovation and technology like data processing centers. All this will generate quality jobs and wealth for the country while reducing energy dependence on third countries.

 

This Post is submitted by Climate Scorecard Spain Country Manager Juanjo Santos.