There is so much wind and solar energy in Spain that it is unbalancing the electrical grid. The solution is more flexibility

Spain has so rapidly developed its capacity to generate electricity from renewable sources that an imbalance between energy supply and demand is frequently found, especially during hours of high solar production. Making the network more flexible and electrifying the economy have become priorities for the sector.

A powerhouse in renewable energies. Spain has doubled its wind capacity in the last fifteen years, making it the first source of energy above nuclear energy. The Spanish solar industry has multiplied by eight during the same period.

A favorable climate, the elimination of regulatory obstacles and the introduction of subsidies for installation have made Spain the second country in the European Union for renewable capacity.

The problem of excess production. Now excess production poses a dilemma. Despite the increase in GDP, electricity consumption has been falling in recent years in Spain. Electricity demand in 2023 was lower than in 2020 during the pandemic, and the lowest since 2003.

There is a decoupling between energy demand and the economy, caused by high prices in the years after the invasion of Ukraine (which discouraged consumption) and greater energy efficiency, but also a surplus of renewable energy.

How the energy surplus affects. The electrical system must have a balance: electricity demand must equal generation. But during daylight hours, when solar energy production is particularly strong, the balance between supply and demand is destabilized, driving prices down and even into the negative.

Although very low prices benefit consumers, they are a potential problem in attracting investment to the industry. Paradoxically, they can be an obstacle to the energy transition.

Electrify the economy. Concern about excess electricity in Spain leads to the need to further reduce the country’s dependence on fossil fuels. The government has set a target for 34% of the economy to depend on electricity by 2030.

Electricity may be the cheapest and most competitive way to produce clean energy, but many facilities need to be renovated to electrify important sectors in Spain, such as chemicals and metals.

However, there are also opportunities on the consumer side. Spain is lagging behind many of its European neighbors in the installation of heat pumps in homes and in the use of electric cars, which only represent 6% of vehicles in circulation.

Increase flexibility. There are other ways to address the decoupling between supply and demand, such as an increase in energy storage capacity through the installation of large-scale batteries.

Installing batteries on both the supply side and the demand side of energy ensures flexibility in the system to match electricity generation and demand during the day and night, as is the case in California.

It is a global European problem. A characteristic of the type of electricity grid that Europe will have as solar energy has a greater participation. Gas plants do not run continuously: they operate for only an hour or two and then stop, incurring additional costs just to start up.

These costs have to be compensated in some way, which increases electricity prices. Large-scale batteries could help balance residual load (demand, less solar and wind power) across Europe.

Both negative prices and spikes in the cost of electricity can be a consequence of the transition towards cleaner and more sustainable energy sources. Adapting to these changes will be crucial for everyone involved in the energy market.

Image | Diego Delso, CC BY-SA 4.0

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