María Cañas Delgado – Project Director
This is a translation from Spanish. If you want to read the original version click here.
The Spanish Government has made public the draft update of the National Integrated Energy and Climate Plan (PNIEC) with a vision to 2030. The period of allegations will be open during the summer, until 4 September. The final version of the document will be sent to Brussels in June 2024.
This Plan sets out the executive’s view of how our country’s energy development should be and will be in the coming years. The PNIEC sends a message to the European Union, to national and international investors and to the entire business community in the sector. This is why this document is important, even if it may be more symbolic than practical, as we will see below.
Overall, the new PNIEC aims to increase the targets already set for 2030 and sets out the following:
- 32% reduction in greenhouse gas emissions compared to 1990.
- 48% of renewables over final energy use.
- 44% improvement in energy efficiency in terms of final energy.
- 81% renewable energy in electricity generation.
- Reduction of energy dependence by up to 51%.
Spain maintains its proactive attitude and its intention to set itself as a leader in the Energy Transition by establishing a target of 48% of renewable energy as a percentage of final energy use, compared to the 42% set by the European Union. These ambitious targets will be met with the development of a mainly renewable energy mix by 2030. To this end, the PNIEC sets the following targets in terms of installed capacity or output, compared to the latest version of the plan:
The installed capacity of the electricity system in 2030, according to this new version, will be 214 GW, 34% more than what was foreseen in the last PNIEC.
To achieve this milestone, a significant increase in the main generation technologies (wind and solar) is planned, as well as the reinforcement of others less previously contemplated (hydrogen, biomethane). In addition, key players in the integration of these renewables into the system, which is crucial, such as storage, are making a strong appearance.
Irruption of storage.
The executive has included an increase in the integration of storage systems into the network. The CNMC’s recommendations have long warned of the vital need for such systems to give the grid the necessary flexibility. Storage will help manage the proper integration of renewables into the system, one of the main challenges already facing the sector.
There are a large number of storage projects in the pipeline. However, certain administrative blockages that are slowing down progress must be resolved as a matter of urgency, as well as clarifying, and even rectifying, some regulatory measures that will help the implementation of the new projects envisaged, setting up a clear and adequate regulatory framework.
Spain has an important opportunity in battery storage and, in line with the European policy of defending the value chain in critical raw materials, we must strengthen our industrial value chain. Especially in view of announcements such as the lithium extraction projects in Portugal or Cáceres. We also have a large storage capacity with hydraulic pumping, as we have been doing for decades.
Biogas and biomethane.
Renewable gases also make a more prominent entry in the Spanish PNIEC, albeit only by accommodating European targets, namely the production of 35 bcm of biomethane and increased biogas production. This has already been criticised by the industry as unambitious.
Spain’s capacity in this area is very high, much higher than what is reflected in the PNIEC, thanks to the intense livestock and agricultural activities in our country and the significant quantities of waste generated, which can be used for conversion to biogas and subsequent upgrading to biomethane. Months ago Sedigás, together with PwC, quantified this production capacity in our country in its report “Study of the biomethane production capacity in Spain”.
The consideration of biomethane within the PNIEC is good news, but it should only be the start of a conversation that will lead to a much higher level of ambition..
Self-consumption.
Self-consumption is finally recognised in the PNIEC. Its incredible growth in recent years has led to a target of 19 GW of installation by 2030.
Self-consumption is an important part of the energy model we are moving towards: multidirectional, decentralised and more complex. This technology directly enables citizen participation, closely linked to the energy rehabilitation of buildings and energy savings.
However, their integration into the system is a major challenge for grid operators, who must be highly aligned with self-consumption systems with a constant exchange of information.
Wind and Photovoltaic.
The main protagonists of the Energy Transition continue to be wind and photovoltaic technologies, with a growth of 23% and 95% in the PNIEC (including self-consumption). Undoubtedly, the sun and wind remain the main sources of energy in the new energy model.
Installed wind power remains on target for 3 GW of offshore wind, a target far behind the ambitions of our European neighbours, who are making really good use of the waters of the North Sea. This technology needs a strong impetus in our country. The first step was the definition of the maritime zones envisaged for its development, approved a few months ago by the government. However, we need to build on this by holding auctions.
Spain is positioning itself well in the industry associated with this sector, with ports such as A Coruña gaining prominence, where towers and machinery will be built for wind farms in northern Europe. It is a pity that we do not take advantage of this industrial capacity to develop our own marine parks.
According to the PNIEC, photovoltaics continues to grow at an unstoppable rate. The projection of all this photovoltaics makes it necessary to adopt, in equal measure, integration mechanisms such as storage or hybridisation.
Tension in the supply chain.
This significant amount of GW announced by the PNIEC should be operational by 2030. This means:
- We need to build and install 32 GW of wind power in the next seven years.
- We need to install 50 GW of PV in the next 7 years (including self-consumption).
- We need to develop the renewable hydrogen industry, aiming to have 11 GW of electrolyser production in operation by 2030.
- All these new GW must be integrated into the grid without causing absolute collapse.
Common sense suggests that there is no capacity to build and integrate so much capacity in such a short period of time. It is true that in recent years we have kept up a great pace (especially in photovoltaics) but supply chains are already starting to suffer. Only a very big change of pace, backed by a major injection of investment, could give us the right push to reach the necessary speed.
Stability and flexibility in the network.
The construction of all the aforementioned capacity is an important point. However, the integration of all this capacity into the system is also another drawback that marks this PNIEC as over-optimistic. At least by 2030.
Meeting storage targets is only the first of the prerequisites. In order to build a truly stable and efficient electricity system of these proportions, the transmission and distribution networks of our country must be transformed in the same way. Without it, we will be picking up pieces, very nice pieces, but they will not fit into the overall puzzle.
Demand.
Finally, they say that there is no supply without demand. In this sector, the opposite seems to be the case. The recently published PNIEC estimates electricity production of 358,744 GWh in 2030, a far cry from current electricity demand.
The PNIEC envisages that part of this production will be exported to France. However, interconnection projects with our neighbouring country do not look very promising. They all entail high investments, as well as very long development and construction times. I don’t think we can rely on exports to free up excess electricity production that we don’t need within our borders.
We must generate this demand by electrifying key sectors, such as industry, residential consumption and transport. Even on this last issue, the electrification of transport, the PNIEC errs on the side of optimism. It envisages an electric car fleet of 5.5 million units in 2030, compared to less than one million today.
Good leadership.
Although the PNIEC sets overly ambitious and probably unachievable targets for 2030, I do believe that it is the PNIEC we need. From here we have to solve the problems that we already know all too well in the industry, and also the executive and the regulatory companies.
Starting with regulatory simplification, incentivising electricity demand and ensuring the necessary grid integration mechanisms, it is possible to build an electricity system in which renewable energies are the main protagonists.
Along the way, we have the opportunity to develop a highly competitive Spanish industry and position Spain as an energy benchmark in Europe. Let’s keep working for it.
María Cañas is Director of projects at Grupo Arrate. From this position of responsibility, the different projects of Southland and Arrate Energías, two of the Group’s companies, are centralised.
Maria has been working in the energy sector for more than fifteen years. Trained as an industrial engineer, she has worked in different areas of the sector throughout her career, as head of the operation, maintenance and works area or assistant manager in project development.
