The Spanish electrical system wastes an important – and growing – part of its potential for electricity from renewable sources. It is a fact that worries experts. The system dispenses with windmills or solar plants, or orders their operation to stop because there is not enough demand to absorb that supply.
Given the current low demand for electricity – we are consuming less than in 2003 – the occasional abundance of renewable resources (wind and solar) causes, especially in spring and autumn, collateral effects, which pose new challenges.
The economy is not decarbonized and is not electrified at the required rate, something essential to reduce emissions and mitigate global warming. It does not occur either in the transport system or in heating.
The impossibility of taking advantage of the full potential of renewable electricity sources is a metaphor for how the decarbonization of the economy (electrification) is not advancing at the desirable pace. Many experts see a lack of synchronization between electricity supply and demand, on the one hand, and the insufficient deployment of electrical connections, on the other.
The wastage of this potential (wind turbines and solar plants) occurs because there is not enough electricity demand or because it is lower than initially estimated.
It can occur for structural reasons, when there is an “excess” of renewable generation and having to maintain a minimum of technologies in operation (generally nuclear and combined cycles), or for circumstantial reasons, such as a more or less punctual simultaneous abundance in a node of wind and/or solar resources, or when demand drops more than expected, especially on holidays that already have little demand in themselves.
The interruptions of renewable sources –due to “technical restrictions”– led to a total of 78 GWh (78,000 MWh) not being introduced into the transmission grid between January and February 2023 (winter months with a lot of wind generation). of electricity production (of which 72 GWh corresponded to wind power), 4 GWh to solar thermal and 2 GWh to photovoltaic. The equivalent of annual consumption was lost in those two months! of some 22,000 families; that is, more than 60,000 inhabitants, more than the annual electricity consumption of a provincial capital like Segovia, according to the Wind Energy Business Association (AEE). Unused electricity from renewable sources has multiplied by six in one year (since in 2022 the disconnection only affected 13 GWh).
This situation occurs in different phases. If the electricity market operator (OMIE: Operador del Mercado Ibérico de Energía), which is in charge of matching supply and demand, finds that there is not sufficient demand for the generation offered, it cannot be matched or scheduled the next day or in the following hours.
Solutions: electrify the economy
More batteries and improve connections with Europe
Installing battery systems, hydraulic pumping, improving interconnections and electrifying the economy are some solutions to achieve greater use of renewables. Now the big batteries are expensive, since the little need for them means that few are manufactured, with which the technology is not yet industrially mature. “The battery manufacturers tell us that we will have to help them, since now they would only enter 60% of the costs,” says Assumpta Farran, general director of Energia. Everything indicates that this new activity will take shape as a new business in which the promoters will receive a remuneration (read: electricity bill) for the service that having this technology available means. They will be the capacity markets, an expression that is reminiscent of the capacity payments charged by the cycle plants for being stopped available in case they are required to start up.
“Without sufficient capacity to transport energy, there will be no energy transition,” admits Red Eléctrica, for whom the “current electricity planning (2021-2026)” is advancing at a good pace, since, with an investment of almost 7,000 million euros in In the coming years, it will allow more renewable energy to be connected and integrated, until 67% of electricity generation comes from green sources by 2026.
In this line, the reinforcement of the interconnections with Europe will be key, since they would make it possible to maximize the integration of renewables throughout the continent. In this way, Europe will be able to consume Spanish wind and photovoltaic surpluses and vice versa when needed here. Now they are working together with the Réseau de Transport d’Électricité on the future interconnection between the two countries through the Bay of Biscay, an essential project in this regard. Jaume Morrón, a renewable energy consultant, believes that in order to deal with the excess of renewables, “the closure of nuclear plants must be accelerated: make room for renewables.” His equation is simple. If there are more and more renewable sources, there are plenty of nuclear ones. “Nuclear plants must be closed earlier, given the progress of renewables, with the exception of Catalonia,” he says. Morron says that decarbonization “will be done by making electrification more attractive, with measures such as lowering electricity tolls and power term or prohibiting gas heating”, as the German government has planned for 2024, to replace them with boilers electrical. Likewise, he deems it a priority “to grant more subsidies to the electric car, eliminating cumbersome procedures. “The energy transition is working; but companies are tackling electrification faster than the regulatory world, Red Eléctrica and the Ministry”, he adds.
Red Eléctrica says for its part that wind and photovoltaic “are not manageable energies”, because, “by their very nature, the sun and the wind are not available at all times and whenever we want them”. For this reason, he maintains that achieving a decarbonized electrical system “will require providing it with sufficient renewable installed power to be able to cover peak demand (working days in the middle of January or July) and, on the other hand, having backup sources and other tools that provide stability to the system”.
Red Eléctrica, for its part, can also intervene in the last hour before the delivery of energy, in a last attempt to match supply and demand in the so-called adjustment markets. During the last year (rolling) the reduction in renewable production (or net discharge) in these adjustment markets (last minute) has been 0.8% of total production, says the company.
But there is more. Along with the losses in the generation and demand balance, there are interruptions and forced stoppages in the production of clean electricity in areas of the network that present “saturations as a result of a high concentration of renewable production at certain points and at certain times”. , says Red Eléctrica.
These interruptions, attributable to “system security” reasons, are another cause that prevents everything that the renewable resource would allow from taking place.
Red Eléctrica maintains that these network restrictions (curtailmenlt, in technical jargon) are far from the admissible limit. It alleges that it represents 1.6% of the total (from May 2022 to April 2023), “well below the 5% that European regulations consider acceptable” for a level of penetration of renewables of 50% for the annual computation. (Spain reaches 52% so far this year), and is below the known values of other countries.
Renewable energy that is not placed on the daily market does not have financial compensation, but that which cannot enter due to the adjustment mechanism or suffers from the technical restrictions that have arisen does receive compensation.
Salvador Salat, co-delegate of UnefCat (photovoltaic sector), stresses that this wastage of renewable resources has been growing and that “the problems have multiplied this past spring” coinciding with an increase in this clean production. In his opinion, “if what happened this spring is extrapolated to the whole year,” the impact would be greater, he says.
“Furthermore, it is not possible to verify if it affects all generators in a homogeneous way, or if it affects some critically, and others, not at all,” he laments.
“The figures clearly indicate that generation capacity has increased and, on the other hand, demand is falling,” says Heikki Willstedt, director of energy policies and climate change at PREPA. The economy is hardly being electrified with technological changes, such as the introduction of electric vehicles or heat pumps, despite being much more efficient than alternatives that burn fossil fuels.
In fact, the demand for electricity has contracted in recent times due to the chain of mild winters and due to an economic recession in the industrial sector.
The desirable goal of decarbonization involves reducing energy demand, but this goal should lead to an increase in electricity generation. Because? An example: changing a combustion car for an electric one reduces the demand for energy by four, but as a counterpart, the demand for electricity increases.
What happens is the drama of an electricity market that without sufficient storage systems means that the offer must be exactly equal to the demand. It’s a fry and serve market. If there is no demand, the offer must fall in the same proportion; if not, the power grid collapses; It is the dreaded blackout or widespread blackout.
“Reducing the demand for electricity is the opposite of what we should be doing, since to decarbonise the economy we need electrification in many sectors that are not yet electrified. We are not doing well”, says Assumpta Farran, General Director of Energy of the Generalitat. Last year the electricity demand in Spain fell by 2.4%. “The focus has been on supply but not demand, and a market with a lot of supply and little demand doesn’t work,” she adds. The energy planning of Catalonia foresees that by 2050 76% of the energy will be electric and that it will reach 34% in 2030 (while now it is only 24%, after 100 years of electrification).
“We have jumped into the pool to produce with renewables; and we have not jumped into the pool to electrify the economy”, sums up Salvador Salat. “Mobility needs to be electrified, to make it electric, and also in the heating sector, which means promoting heat pumps,” he adds. “It has been convincingly demonstrated that building 2,000 windmills has turned out to be faster than changing 20 million cars”, he adds.
Precisely 2,000 5 MW windmills produce the same electricity needed to move 20 million electric cars an average of 10,000 km per year. The decarbonization of the electricity sector has been achieved thanks to private capital investments; on the other hand, the decarbonization of the other sectors (vehicles, heating) depends on the pockets of millions of citizens with limited income.
And while the demand for electricity contracts, the supply of renewables grows. Photovoltaic production has entered into a whirlwind in the electrical system.
In spring and autumn, electricity from wind and photovoltaic sources contributes almost all of what Spain consumes. In spring, “at daylight hours, we almost don’t need nuclear power anymore,” says Salat. It’s the first time it’s happened. And it will be a phenomenon that will grow. More than 8,400 photovoltaic MW have been installed in two years. 5 years ago, in Spain it had installed 5 GW of power; in 2022 there were already 19.5 GW (of which there are 3,500 MW for self-consumption; and of these, 500 MW in Catalonia
This omnipresence of renewables in the market means that the promoters themselves are harmed. There is such an abundance of supply that it works against the owners of facilities that operate without receiving premiums.
The great contribution of renewable energy in the network at central hours, accompanied by the null presence of gas (which, being the most expensive energy, is the one that therefore marks the price of compensation for all other sources) means that in certain time slots, it is the hydro that sets the price, thereby lowering the remuneration for wind and solar. “These very low or almost zero prices occurred before some time, some day; now they pass practically every day”, says Salat. The remuneration obtained by the renewable plants in the strips of maximum insolation can be 20 euros per MWh or, even, 0 euros per MWh, since the gas (which sets the price) does not enter when it is sunny but in the afternoon and night.
The result of all this is a paradox: “The more renewables are installed, the more they harm themselves,” say sources in the photovoltaic sector. It is the cannibalization of prices. The large volumes of renewable energy produced at once reduce expensive gas power and thus lower the overall price for that period. Promoting renewables has thus proven to be a double-edged sword.
The problem can be aggravated considering that the Administration is processing 40 GW of new solar installations (which have already obtained a favorable environmental impact statement), that is, twice the amount already installed (19 GW). Practically, there is already enough solar energy to meet the integrated national energy and climate plan (Pniec) by 2030.
The energy transition cannot occur only in the electrical system, say the associations
And all this has an impact on the investors’ charts of accounts. Photovoltaic solar parks are promoted thanks to bank loans; and if that economic retribution falls, the repayment of these credits is complicated; This constitutes a great challenge for developers, who will have to overcome it, for example, by asking for longer-term amortizations.
The situation of tension will be accentuated in the future with the growth of production with renewable sources, if the demand is not accompanied by growth with new sectors that are electrified. The low remuneration can be a reason that makes developers feel unmotivated when facing new investments, a perspective of low prices, especially for photovoltaics.
40 GW is the power of the new solar plants that already have a favorable environmental impact statement
Now the problem of stoppages and insufficient pay occurs in spring and autumn, but in two years it can also occur in summer. “In a future with more renewables, there is a greater risk that remuneration will become cheaper and there will be a slowdown in these investments until electricity supply and demand are rebalanced,” says Salvador Salat (UnefCat).
Assumpta Farran, General Director of Energy of the Generalitat, explains that the rapid process of creating renewable facilities and that the electricity produced comes out at zero price “is something that cannot be endured.”
She argues that we are a country that is very given to launching into creating an abundant supply (without planning to dose it) and not thinking so much about demand. “It has been seen in the creation of AVE stations, or gas infrastructures, or the Castor gas warehouse,” she explains.
Given the drop in remuneration and market fluctuations, solar developers point out that a solution may be bilateral contracts (PPA) with clients, such as large companies, which allow long-term guaranteed income, even if it is at a lower but more secure remuneration.
“It is frustrating to see how everything that has been done to decarbonise the electricity sector with investments in renewables has not had the same translation in other sectors, in which almost no progress has been made,” adds Heikki Willstedt, representative of the Business Association Wind.
The problem of stoppages and insufficient pay occurs in spring and autumn
The associations of the sector estimate that the energy transition cannot rest only on the electrical system, which contributes 13% of gas emissions. His argument is that in the energy sphere, only combined cycle thermal plants (gas) and cogeneration in the industrial sector remain to be decarbonised, while the large pending sectors continue to be transport (electric vehicles) or heating (heat pumps). .
Transport in Spain is the sector with the greatest weight in gas emissions (29.6% of the total); and, within this, road transport accounts for 27.8% of total emissions, according to the national gas inventory of the Ministry for Ecological Transition.
The energy sector has reduced CO2 emissions by 68% between 2005 and 2021, going from 112 million tons to 35.9 million. On the other hand, in the case of transport, the decrease in that period was 16%. If you want to advance in the energy transition and not waste indigenous renewable resources, policies are necessary that do without gas and fossil fuels to be replaced by renewable electricity, say these experts.