Spain: the dilemma the country faces for producing too much electricity with renewable energy

Spain: the dilemma the country faces for producing too much electricity with renewable energy
Spain: the dilemma the country faces for producing too much electricity with renewable energy

Image source, Getty Images

Article information
  • Author, Guy Hedgecoe
  • Role, BBC News, Spain
  • 9 minutes

The moors of Castilla-La Mancha, in central Spain, were once known for their windmills.

Now wind installations, their modern equivalent, occupy the horizon of this region.

The 28 enormous turbines of the Sierra del Romeral wind farm, in the province of Toledo, dominate the landscape.

Operated by the Spanish firm Iberdrola, they are part of a trend that has accelerated the production of renewable energies in Spain during the last five years, turning the country into a powerhouse of this industry.

Image source, Guy Hedgecoe

Caption, Spain has bet heavily on wind farms, such as the one in Sierra del Romeral, in Toledo.

Power in renewables

Spain’s wind generation capacity, its main source of renewables in recent years, has doubled since 2008, while solar energy has multiplied by eight during the same period.

This makes Spain the EU Member State with the second largest renewable energy infrastructure, after Sweden.

Earlier this year, Spanish President Pedro Sánchez described his country as “a driving force in the energy transition on a global scale.”

The boom came shortly after Sánchez’s first government began in 2018 with the removal of regulatory obstacles and the introduction of subsidies to install renewable energies. And the pandemic accelerated the trend even further.

“The impact of Covid was very positive for our sector,” says José Donoso, executive director of the Spanish Photovoltaic Union (UNEF), which represents the solar panel sector.

“People saved money, took their time to think about what to do with it, and many decided that it was better to invest it in their roof than have it in the bank,” he adds.

For its part, the government presented new and more ambitious objectives, including covering 81% of Spain’s electricity needs with renewable energy by 2030.

Image source, Getty Images

Caption, Spain has seen a boom in the number of people installing solar panels on the roofs of their homes.

Too much production

However, behind this success story there are concerns in the electricity industry due to the imbalance between supply and demand.

Sometimes there is a surplus of electricity.

Although the Spanish economy has recovered strongly from the pandemic downturn and is growing faster than other powers in the bloc, electricity consumption has been falling in recent years.

Last year, demand was even lower than that seen in 2020 during the pandemic, and the lowest since 2003.

“What we saw until 2005 was that, when the GDP increased, the demand for electricity increased more than the GDP,” explains Miguel de la Torre Rodríguez, head of systems development at Red Eléctrica (REE), the company that operates the network. national of Spain.

More recently, he says, “we have seen that demand has increased less than GDP. “What we are seeing is a decoupling between energy intensity and the economy.”

There are several reasons for the recent drop in demand, including the energy crisis caused by the Russian invasion of Ukraine in 2022, which caused businesses and households across Europe to reduce their use due to high prices.

In addition, energy efficiency has improved, and the greater contribution of renewable energy has also contributed to reducing the demand for electricity from the national grid.

Rodríguez says that during daylight hours, when solar energy production is particularly strong, the balance between supply and demand can become unbalanced, which has an impact on prices.

“Since the electrical system always has to be in balance – demand has to equal generation – that means there has been excess generation during those hours,” he says.

“This has lowered prices, especially during certain hours, reaching zero or even negative prices“.

Image source, Getty Images

Caption, Pedro Sánchez promised to turn Spain into a reference country in renewable energies.

Although very low prices benefit consumers, they are a potential problem in attracting investment to the industry.

“This can make it difficult for investors to increase their commitment to new electricity based on renewable energy,” says Sara Pizzinato, renewable energy expert at Greenpeace Spain.

And he states that this “can be an obstacle to the energy transition.”

“Electrify” the economy

Concern about excess electricity in Spain has led to debate on the need for accelerate the “electrification” of the economywhich involves moving it away from fossil fuels.

The Sánchez government has set the goal of making that 34% of the economy depends on electricity by 2030.

“This process is slow and we need to accelerate it,” says José Donoso, from UNEF.

“Electricity is the cheapest and most competitive way to produce clean energy,” he says, which is why he believes that “there is a need for facilities that use electricity instead of fossil fuels.”

Move to total dependence on electricity is considered unrealisticas for some important sectors, such as chemicals and metals, the transition can be difficult.

However, Donoso and others see plenty of room for faster electrification.

For example, Spain lags behind many of its European neighbors in installing heat pumps in homes and in the use of electric cars, which only represent around 6% of vehicles in circulation.

Pizzinato agrees that electrification is crucial, but believes there are other ways to address the supply-demand dilemma, such as phasing out the use of nuclear plants more quickly and increasing energy storage capacity.

“We need to involve more people and more industries in managing the demand side, making sure there is the necessary flexibility in the system to better match generation and demand during the day and night.”

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