Building a sustainable future

Making the magic: our electrical system.

Joaquín Sanz García - Operations Manager

This is a translation from Spanish. If you want to read the original version click here.


Electricity is for many of us something invisible that we take for granted, turning on a switch, turning down the bread in the toaster, taking something perfectly preserved from the fridge… It is true that in the last two years a large part of the population has begun to take an interest in how electricity is generated and how it reaches our homes, seeking explanations for the “electricity bill”. However, the energy sector is very large, complex and very important. Today I will try to write about one of its main gears for those who are not entirely familiar with it: the electrical system.

The Spanish electricity system has an installed capacity of 120,469 MW (June 2023). The main electricity production systems by capacity are wind (30,173 MW), combined cycle (26,250 MW), photovoltaic (20,892 MW), hydro (17,097 MW) and nuclear (7,117 MW). In addition to these technologies, other technologies such as coal-fired power plants, waste-to-energy production, diesel engines, etc., are also used. These 120 GW installed serve to cover an average daily demand of about 25 GW. In a totally simplistic way, we could say that we only need 20% of the installed power in our system in operation at the same time to cover the electricity demand in Spain.

However, installed power does not equal production. For example, in Spain we have an installed nuclear capacity of 7,117 MW (five nuclear power plants) and this technology produced around 56,000 GWh in 2022 (out of an annual demand of around 250,000 GWh). In other words, it produced 21.4% of the energy demanded with only 6% of the installed power.. Wind energy, on the other hand, has an installed capacity of 30,173 MW and produced 59,805 GWh during the year, satisfying 22.8% of annual demand with 25% of installed capacity.. Why are there such large differences? Nuclear technology allows for stable, constant and controllable production while wind energy depends on wind.

Both technologies have their advantages and disadvantages and the grid operator, Red Eléctrica, must play with them to meet the country’s demand on an ongoing basis. Adding to these two energy sources the other 16 existing ones, we have a curious and complicated energy puzzle. Some pieces of this puzzle have a more stable production (pumped hydro, nuclear, combined cycle) and others are more circumstantial (solar, wind). Thus, at times some technologies play a leading role and at other times they serve as a complement. So, for example, when solar production drops at night, other technologies come into play.

The illustration above shows the energy demand and production on 21 April 2023, the day I have selected as an example. In it, we can see how at ten o’clock at night wind (green), hydro (blue), nuclear (purple) and combined cycle (yellow) were the main generators of the energy being demanded, while solar energy does not appear. At 15:00 on the same day, the mix of energies in operation must have been very different (solar energy would predominate), just as at 4:00 in the morning, when the wind may have lost its intensity, the absence of wind energy must have been replaced by another available technology.

This is the complicated game we play every day and it involves a multitude of small and complex technical details that we are constantly working out to create the magic and to make everything light up: our homes, streets, offices, industries… Therefore, the way in which electricity is generated and distributed by the grid is a key aspect of our day-to-day lives, although for most people it goes unnoticed..

We are currently in the midst of a profound transformation of the global energy sector. This transition directly involves both how we generate energy and how we distribute it across the grid. Given this situation, it is essential to correctly define how we are going to design our electricity system for the immediate future, as it is the instrument that links the production of energy with its consumption.

To respond to this, on 19 April 2022 was approved the Transport Network Development Plan 2021 – 2026The process started on 2 March 2019 and has gone through a proposal phase, two study phases, an allegation phase, a consolidation phase and finally its approval last year. This work involved open participation and the work of the country’s main regulatory bodies (CNMC). This Plan presents an electricity system (in its “thickest” dimension, the transmission grids) focused on three objectives: environmental sustainability, security of supply and economic efficiency. One of the main measures to meet these three targets will be the installation of large amounts of renewable energy, in line with the ambitious Energy Transition we are undertaking.

In the design of this Network, the National Integrated Energy and Climate Plan has played and continues to play a fundamental role. As my colleague Maria has already commented in a previous Insight, Spain plans to integrate a large amount of renewables into the system, more than 60 GW in the coming years, in line with the Energy Transition towards an emission-free model. This is a major and complicated challenge in which our electricity system plays a crucial role: no matter how many renewable parks we develop and even build, without good grid integration, we may create more problems than solutions. The energy produced at the different points (and which the system regulator has to play with in the complicated jigsaw puzzle we have discussed) has to travel from the place of generation to the place of consumption through lines and substations. If we intend to install this renewable capacity we have to adapt the grids and connections in the same way.

The pieces of the puzzle have to be in balance and well distributed for the grid to work efficiently, balancing two main maxims: reasonable prices and as little energy waste as possible. In other words, matching supply and demand in the right way. This is where the specific characteristics of each technology come into play.

Photovoltaic technology, for example, provides us with abundant electricity during sunshine hours at low cost. Thus, during the last few months we have seen prices of €0 per MWh during the day only to shoot up to more than €100 MWh at night, when there is no sun. This large production of solar energy during daylight hours can also lead to significant mismatches between electricity supply and demand, producing the famous duck curve that we are already beginning to see. Wind energy is also intermittent, because it depends on the wind.

Other technologies offer a predictable and controllable supply, such as nuclear energy or those that use fossil fuels (coal, oil or gas). The former is at the center of heated political and social debates, as well as raising serious profitability issues. The second energy sources are the ones we are trying to eliminate due to the high emissions they cause and their substitution is the issue we are talking about and how complex it can be.

Other technologies, such as pumping hydraulics, are also secure in terms of their foreseeable supply, although in this case they use the valuable resource of water. Biomethane (renewable gas generation from waste) is also a source of energy that can offer a stable supply, although our country needs to give an important boost to its implementation.

The planning of our electrical system has to fit all these pieces together. The Transportation Network Development Plan 2021 – 2026 envisages a number of investments of 6,964 million euros1.26 billion for international interconnections (France, Portugal, Andorra and Morocco) and reinforcement of the national electric power system in its transmission grids. Thanks to these investments, all the new power we intend to install should be integrated into the grid, maintaining reasonable prices and avoiding energy spills and imbalances. But this is the theory, a lot has changed.

In the illustration we can see an important curve during sunlight hours (from 9:00 to 21:00). During these hours, the installed photovoltaic power produces a large amount of energy that feeds the system to a large extent. In some cases, production may even exceed demand, causing pricing problems (solar energy is cheaper than other types of energy and can even reach negative prices) and technical problems (by stopping the production of other systems, something that is not so simple, especially if it has to be done quickly or when producing more electricity than necessary). This curve we see is the well-known “duck curve”, one of the several problems we must solve when exchanging one chip for another in this energy transition. (Image by Francisco Valverde in el Periódico de la Energía)

The objectives proposed by the PNIEC and the objectives requested by the sector are very ambitious and the Electricity Grid is the key that will allow the puzzle to fit perfectly or it will be impossible to be formed.. We can process thousands and thousands of MW in projects, we can even build dozens of wind farms and connect them to the grid in any way, but if this is not done in accordance with a serious planning and a well-thought-out long-term strategy., we will create a multitude of problems and throw away millions of euros in investments..

There are many elements to be taken into account and which can be solutions to the problems posedstorage can correct the “problems” caused by photovoltaic, the presence or not of nuclear, the stability that new renewable players such as biomethane can offer, the increase in demand with the electrification of currently fossil fuel consumption (boilers, vehicles), renewable hydrogen, wind and photovoltaic hybridizations, the significant increase in self-consumption and its impact on national demand, interconnections… all these elements must fit together to create a balanced system.

The future of our country’s energy sector, which profoundly affects the nation as a whole, depends on the correct planning of our electricity system. The Energy Transition we are going through is a great opportunity for Spain to face the outside world, but let’s start by doing things very well at home.

Joaquín Sanz García is Operations Director of Arrate Energías and Southland. From these companies the Arrate Group develops and builds assets for third parties as co-development or provision of services, in addition to advisory and consulting services.

Joaquín has fifteen years of experience in the renewable energy sector in markets such as Mexico, Chile, Bulgaria and Spain.

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