Ghosts of the past literally threaten a new renewable slowdown.boom‘ Solar energy in Spain. The first executives of the major Spanish power companies (Endesa, Iberdrola and Naturgy) warned of a possible relaxation in wind and photovoltaic power plant investments and said, “passion” Proposed by the new Government roadmap – the so-called Integrated National Energy and Climate Plan (NECP)– aiming to produce 81% of electricity with renewable energy sources within seven years. The threat is real, shared by renewable associations, but its realization will depend on whether it is tackled in a timely manner.
“They are not realistic amounts. if we take into account historical statistics in addition to the technical difficulties in integrating new capacity such a short timeCEO of Endesa, Jose Bogas, on the PNIEC update in the presentation of the company’s third quarter results. mother fatigue symptom One of the renewable angers is that the growth rate is not accompanied by a proportional increase in electricity demand, as there is no relevant change in the use of combustion cars to electric cars, from gas heating to heat pump or the decarbonization industry.
And it drives the industry into the classic fear that supply will exceed demand: “We need to analyze in detail how demand will rise and what measures we can take to match supply with demand. Without demand, renewable energy will not be built,” he warned. president of the day Iberdrola, Ignacio Sanchez-Galan.
Diagnosis
The key is, first of all, on a date: 2025. There is currently around 50 GW in the pipeline that needs to be installed in two years and the Government’s plans are to realize most of these projects. update PNIEC, which envisions an increasing renewable power 42GW. This roadmap reveals a demand of 267,000 GWh for that time (previously it was 275,000 GWh), but last year, the Government’s savings plan reduced electricity demand by 6% due to industry competitiveness problems and the input of Self-consumption, August 2022-July In the rolling year of 2023 it slumped to a lower level of 243,000 GWh.
This means that, in practice, most of the energy produced by new power plants is Risk of no buyers and with this potential danger very little banks dare to lend money to promoters to finance construction of parks. At this point, the main demand of the sector to the Government is; Extend the 2025 deadline beyond. “There are many generations with inertia that are being processed and must meet administrative milestones. You should have the building permit in January and then the project owner should decide. If you have the economic capacity to build, you must decide what to do; If you have to go and ask for financing, the banks will examine the scenario of the asset and if the supply and demand do not match, it will be difficult for them to finance,” explains AEE wind energy employers general manager ‘ the association, John Virgil.
In addition, Virgilio, this concentration of projects as a result a material shortagea “gradual” social opposition that can “much” increase the cost of some projects that were well above their price a few years ago, but also undermine plans. Even the litigation of licenses in recent days threatens to halt projects.
difficulties
Questions about demand, supplies and growing social opposition are not the only obstacles. Naturgy’s president, Francisco Reynés, confirmed that the company will be betting. wind energy at the expense of photovoltaic In its new strategic plan until 2025. falling solar pricesnumbers reaching almost zero during the central hours of the day thus reducing the visibility of the facility’s depreciation capacity and profitability. “Until solutions like batteries are developed shopping centre The energy produced and not consumed, the electricity market must change its functioning to fix them. energy discharges and promote a reasonable return on assets”, industry sources state.
But these economic “dumps” don’t just happen when supply outstrips demand (this now happens on weekends or during holidays like Easter), photovoltaics have another problem: network. The rapid growth of the current energy plan enabling it to meet the 2025 targets – from 4GW installed in 2017 to 2023, to over 20 GW, they have increased the target to more than 1000 in total in the new update of PNIEC. 50GW–, also a adaptation of the electrical grid. In other words, discharges occur at some points of the network – lost electricity–. It would be equivalent to a road with too many cars. The roads need to be widened so that some vehicles do not end up in the ditches. and same with cries.
Resort
But there are those who see this as a problem. chance. This is the situation of the director general of the photovoltaic association (UNEF), Jose Donoso“The problem is not not investing, but rather what needs to be done to make investments happen,” he warns, choosing to reverse the tortilla. First, suggest extension of deadlines Renewable installation after 2025. Latter, to promote storage Third, they are more organized than an “appropriate” price signal. Tenders “as soon as possible” so all incoming renewable generation your salary guaranteed –through a Contracts for Difference scheme– and not penalized by the low prices of the electricity market.
further electrification to boost demand – “gas replacement for electricity is too late” – and change in philosophy network planning – “current planning is static because it was targeting large investments but needs to switch to planning more dynamic this corresponds to the energy transition process with dozens of facilities spread across the region”. “Inside impossible something happens when you don’t Nothing. When you set a goal, it doesn’t come alone, you have to take steps to reach it. Sometimes we forget why we’re doing this. for this climate emergency and economic opportunity and we should take advantage of it,” he insists.