Spanish PV resurgence? Not on the horizon

According to local press agency Europa Press, Spain is planning to install 8.537 GW of new renewable energy capacity by 2020. Of this, 1.37 GW will come from solar PV technology and 2.511 GW via CSP projects. Earlier this week Forbes published an article supporting this development.

Why this is bizarre

Investors have been puzzled since in 2014 they saw the Spanish Government reforming the electricity market by cutting feed-in tariffs and obliging renewable power plants to compete in the market, aiming eventually to reduce public electricity costs. So, how a government that last year faced the renewables sector as the source of all problems relating to the country’s energy system, has suddenly warmed to renewable energy?

A factor to consider is the Spanish electrical system overcapacity issue. Theoretically, the RD413/2014 renewable energy law approved in June opens public procurement auction for new plants but this is not expected to happen soon, Aitor Ciarreta, professor of Economics at the University of the Basque Country, Bilbao told pv magazine: "Spain’s renewable energy sector major problem today is the excess capacity together with depressed demand", Coarreta argued.

Targets to keep the EU happy

Spain’s Photovoltaic Union (UNEF) told pv magazine the numbers appearing at the local press come from a planning dated in November 2014 that the government sent to Brussels trying to prove that Spain will reach its 2020 commitments.

This plan envisages 6,030 MW of solar PV, 2,511 MW of CSP, 29,479 MW of wind and 17,492 MW of hydro power capacity installed by 2020.

The EU’s 2009/28/EC directive on the promotion of the use of energy from renewable sources calls for Spain to produce 20% of its energy from renewable sources by 2020, up from 8.7% in 2005.

However, the Spanish Government’s targets "are not reflected in the current regulation and the Spanish situation about PV development is very different" said UNEF.

"To add 1.3 GW of new photovoltaic capacity by 2020, Spain should increase its PV investments more than a 400% per year, if we take the last two years as reference" a UNEF spokesperson said.

UNEF’s diagram shows how PV installations have progressed in the last years (in orange) and how they must continue in order to satisfy the 2020 goal (in yellow).

2014 statistics

According to data published by the Spanish electricity grid operator Red Eléctrica de España (REE) the electricity demand on the Spanish peninsula during 2014, after factoring in the effects of seasonal and working patterns, fell by 0.2%, representing a slightly lower decrease than 2013, which fell 2.2%. Gross demand was 243,486 GWh, 1.2% lower than 2013. Gross demand in 2014 was 243,486 GWh, 1.2% lower than 2013.

Renewable types of energy in 2014 maintained a prominent role in the overall energy production in the Spanish peninsula, covering 42.8% compared to 42.2% in 2013. Of it, solar PV specifically covered 3.1%, the same as in 2013. Solar photovoltaic installations also corresponded to 4.3% of the total installed capacity at the end of last year in mainland Spain.

Very significantly, REE reports that "the balance of international electricity exchanges remained, for yet another year was as an exporter, standing at 3,543 GWh, 47.4% less than in 2013."

Together with low overall energy demand, this is Spain’s most urgent problem. The country has steadily kept pushing the EU institutions to set a binding obligation for the EU member states to make 15% of their national generation capacity available to other EU nations. Madrid sees the export of energy as a viable solution to alleviate its overcapacity problem and openly complains about France’s unwillingness to build interconnection lines accusing it that protects its domestic power market incumbents from competition. Rather disappointingly, at an EU energy summit in October, EU leaders only renewed their 2002 commitment to increase energy trading through electricity connectors to 10% by 2020.

The February edition of pv magazine features an article investigating the challenges to greater European electrical interconnectivity, despite it seeming a better solution to ensuring stable electricity in the EU in the future.

Leave a Reply

Your email address will not be published. Required fields are marked *