January 11, 2010
Regarding ‘Spain’s renewables boom seen driving gas capacity‘:
The various statements heard during recent weeks by the Spanish transmission system operators for electricity (REE) and gas respectively (Enagas) that Spain would still need to further increase its combined cycle power plants as back-up power for the safe integration of large amounts of wind power in the electricity grid makes it necessary to go a little deeper into the details in order to better explain the various dimensions of the current dynamics between the sectors of gas and renewable energy in Spain.
The Spanish power system during recent years has grown significantly mainly in two technologies: combined-cycle gas power plants with about 22,200 MW of installed capacity at the end of October 2009 (data: REE) and wind (about 17,400 MW of installed capacity at the same moment).
Besides, one should not forget the more than 3,500 MW of solar photovoltaic (PV) already installed due to the boom of PV in 2008. Renewables-based electricity in Spain enters the market to zero euros, such as nuclear, and delivers every kWh generated.
Other technologies, such as gas and coal, with variable (fuel) costs enter the market the last and not always with the power and the hours their owners would like to feed into the grid.
Furthermore, the decrease in consumption as a consequence of the global economic crisis – which Spain is noticing more than almost any other country in Europe – means that renewables are increasing their share in the coverage of demand while on the contrary, gas and coal are losing importance.
According to REE, electricity demand in Spain between January and November 2009 decreased by 4.8% compared to the same period in 2008, reducing the weight of gas-fired combined cycle power plants from 34% to 30.4% and coal-based electricity generation from 16% to 13.1%, while wind power was able to increase its contribution from 11% to 13.7%, as well as hydropower from 8% to 9%.
Furthermore, photovoltaic power already reached a share in electricity consumption of 2.9% between January and November 2009 (still not appearing as their own source of REE in the statistics for the same period in 2008) – signifying a world record regarding its importance in the national electricity mix.
All this means that coal and gas plants operate less hours and lose money. This has triggered a general offensive against renewables in Spain in recent months, including some very strong statements (e.g. from the CEO of Gas Natural, Rafael Villaseca), repeating again and again the same standard speech that “renewable energy is expensive, intermittent, need support of thermal plants, puts at risk the stability of the grid, etc”.
It is quiet logical that each industry defends its own interests, but they should not mislead the public by falsifying data to support their thesis.
Therefore one should have in mind the following when talking about renewable energies in Spain: according to a study by APPA on the macroeconomic impacts of renewable energy in Spain, published in early December 2009, on the one side renewable electricity producers in 2008 received €2,605 million of remuneration. But one the other side, green energy saved oil imports of a value of €2,725 million.
Besides, if renewables hadn’t entered the electricity market, power market prices would have been more than €4,900 million more expensive. Moreover the increased use of renewables avoided a further €500 million of costs for CO2 emission rights.
The overall positive macroeconomic impact of renewable energies in Spain – not accounting the value of exports, the positive impact on health, employment, R&D, etc. – amounted to more than €600 million in 2008.
In other words: renewables saved the country far more than they received. Additionally, if the Spanish government – as announced – really wants to approve a decree which would establish an obligatory quota for coal-based power generation of up to 15% of electricity demand, a prioritisation of domestic coal usage as well as a premium for the availability of combined-cycle power plants, the balance would pay off even further in favour of renewables.
And as we are on dates of Copenhagen: renewables in Spain have proven to be the most effective technology for reducing CO2 emissions with 82 million tons of CO2 avoided in 2005-2008 and, therefore, are essential for a paradigm shift towards a low carbon (energy) economy.
We are testimonies of a polemic debate. Renewables in Spain are protected by a special legal framework, including national and European targets that are far from being achieved: Clean energy in Spain in 2008 didn’t reach 8% of primary energy, when in 2010 it should reach 12%. And until 2020 – according to the binding targets within the new renewable framework Directive (2009/28/CE) – they should triple its participation, reaching a total of 20% in final energy consumption, both at European and Spanish level.
Meanwhile, gas or coal-fired power plants have been installed by its promoters under a law that liberalised its promotion, being under their sole and exclusive responsibility both the benefits and losses.
All this shows that the change of the energy model in Spain has already begun and will continue to cause very strong tensions and conflicts between advocates of conventional energy sources on the one side and renewable energy producers on the other side. These conflicts can only be solved through real and comprehensive energy planning for 2030 including as priority the 20/20/20 goals for 2020 as laid down within the EU climate and energy package which entered into force in late June 2009.
This is precisely one of the proposals in the draft law on a sustainable economy approved by the Spanish Council of Ministers in late November 2009 (with four years of delay) although it remains to be seen how it will look in a year when it has to be passed in the Spanish parliament.
For APPA, however, the priority is the quick and complete transposition of the new Renewables Directive (2009/28/CE) into Spanish legislation by means of an ambitious National Renewable Energy Action Plan 2011-2020 and through an own Renewable Energy Law which would eliminate the persisting barriers for renewables in Spain and would provide the sector with the necessary planning security to achieve the 2020 targets.
Javier Garcia Breva
Spanish Renewable Energy Producers Association (APPA)Author : Letters to the EurActiv editor