Spain’s conservative government tried to stop the transition away from coal, but has been replaced by a coalition which will focus on reinvigorating the economy with clean energy. From scrapping unpopular taxes on solar to creating a Green Fund, the future of renewables looks bright, says L. Michael Buchsbaum.
In 2013 following the collapse of Spain’s economy, several conservative coalitions essentially halted the nation’s once surging clean energy transition. Despite being the fourth largest global wind energy producer, with 23GW already installed and developers prepared for much more, the Mariano Rajoy-led government instead threw its support behind coal power, passed a crippling tax on solar energy, and essentially imploded the green economy. During this time, Spain frequently joined in with Poland and other nations to block clean energy on the EU and EC levels, stymieing progress there as well.
But following months of increasing unpopularity, corruption allegations finally brought down the Conservative regime. In June, a minority Socialist-led government coalition headed by new Prime Minister Pedro Sanchez assumed power. One of their main goals is to re-animate the economy by reversing course and accelerating clean energy development. But with only two years until the next elections, the clock is ticking for the government to make its mark and win over the long-term support of its citizens.
With this in mind, Sánchez came out swinging. He immediately appointed a female majority cabinet, merged the former Ministries of Energy and Environment into the Ministry for Ecological Transition and appointed environmental activist Teresa Ribera as its head. While previously holding various environmental positions within governments before Rajoy, she was most recently the director of the Institute of Sustainable Development and International Relations in Paris. Reporting to her as the new energy secretary is Jose Dominguez Abascal, the former CEO of the Spanish renewables developer, Abengoa.
Days after assuming her post, Ribera announced the scrapping of the hated “sun-tax” that was imposed by Rajoy on all self-consumption PV systems of more than 10 kW. They are also revising plans to resume the curtailed feed-in tariff, remove blocks on distributed generation and find other ways to incentify solar investments.
Despite Rajoy’s attempts to slow it down, between January and June Spain’s renewable power generated a record 45.8% of total energy. Most of this came from a surge in hydropower that, following unusually heavy rains, comprised almost 17% of the energy mix. Assuming the lead source in energy generation, wind powered 22.6% of the country’s total power, rising 10% compared to this period last year. Solar accounted for 4.6% of the mix with the rest mainly powered by coal and nuclear. Despite this, Spain is still short of its EU mandated goal of 20% renewable energy by 2020. At the end of 2016, renewables were only around 17.3% of total capacity.
The nation’s renewable potential is so strong that even with the former government against it, total renewable capacity still increased by 8.5% by year, and Spain still ranks as the fifth-largest installed wind power producer globally. In total, renewable power installations have risen by 53% in the past 10 years, according to state-run Red Eléctrica de Espana. Nevertheless, Eurostat, the European Union’s record-keeping office, recently reported that Spain was near the top of the list in emissions increases, with carbon dioxide spiking 7.4% percent last year. The source is no mystery: 58% of the emissions from the energy come from Spain’s 9.4 GW of old coal power.
With this in mind, Sánchez is keen on unleashing the full potential of renewables energy. Minister Ribera has vowed to draft a new clean energy law by early August and send it to Parliament before the year’s end. Some of the proposed measures being considered include the prohibition of fracking, and the creation of a Green Fund to facilitate investment into sustainable and energy efficient ventures. Under pressure from the EU to announce a plan this year on how to meet their 2030 targets, phasing out coal may be the first, best option. The government has an unusual ally: under the Rajoy regime, the coal plant’s owners repeatedly pressed to shut them down by 2025. Now receiving a friendly ear, Ribera recently stated, “I don’t believe coal has much future.”
But with only a tenuous hold on power, the minority Socialist government can’t afford to offend Spain’s small but politically powerful coal mining sector. While the number of miners has plummeted from 13,000 in 1994 to only a little above 2,000 today, they have an outsize influence. Depending on how they will be supported during the transition, the unions may either block or support the coalition in the upcoming elections. So developing the right plan is key.
Beyond coal, the new government is also keen on gradually shutting down the nation’s five nuclear plants that together have a combined 7GW of capacity. Reluctant to extend their planned service beyond 40 years, this would mean a gradual shut down between 2020 and 2027.
The “new government is positioning the country to become one of Europe’s renewable energy leaders” said Brian Gaylord, senior analyst for southern Europe and South America at Wood Mackenzie. Though even before the recent change in leadership, developers were pressing to build out another 30.5 GW of renewable capacity, now released from legal and political shackles, Spain’s renewable industry is poised to fuel both an energy and economic revolution, repowering both the nation and helping reinvigorate Europe’s own energy transition.
What is Spain’s current status in grid extension in terms of medium-term to long-term storage facilities that are deemed necessary to reach high shares of renewable energy?