New Economic and Legal Context
Economy recovery and electricity demand to grow from 2015
The recovery of the economy, started in 2015, was the main driver factor to register a positive rate of growth of electricity consumption in Spain (1.9% vs 2014) not seen since 2010 after the economic downturn.
The European Commission expects a GDP growth on average over the 2015-2024 period for Spain of 2.2 real growth whereas the Spanish Government expects an electricity demand growth at an average of 1.8% over the period 2016 – 2020.
A new regulatory framework to promote renewables
In order to accomplish the 20% renewables target by 2020 set by the European Renewable Energy Directive, EU countries need to adapt their regulatory framework concerning the promotion of renewables.
Spain’s National Renewable Energy Action Plan 2011-2020 is meant to promote the use of renewable energies across all sectors, which are to cover 22.7% of the total energy production (13.9 % in 2015). Total installed capacity will increase from 49 GW to 72 GW (including hydraulic power).
In 2015, a new economic and legal framework was established by the government in order to achieve EU goals and end a period of regulatory instability.
According to Spanish government estimations, additional renewable installed capacity of 6.5 GW will be needed by 2020: approximately 4.7 GW of new PV plants and 1.8 GW of Wind Farms by 2020. In order to achieve it, new bid energy auctions are expected to happen in Spain from the first semester of 2017 where renewable projects are to compete at a fixed pool price/PPA at the wholesale market. More info Ministerio de Energía, Turismo y Agenda Digital.
Major role of Renewables to secure EU energy union
- Renewables penetration in the generation mix of Spain is needed to secure the energy supply and reduce Spain’s high dependence on imported energy sources (42% of gross inland consumption coming from imported oil).
- Energy interconnectors are crucial to build an Energy Union with a forward-looking climate policy, one of the key priorities of the new Commission as laid down by President Juncker in his political guidelines.
- In addition to the new underground electricity interconnector between France and Eastern Spain (Baixas-Santa Llogaia) that is to double the existing connection capacity in 2017 (2,800 MW) new power lines have been projected to achieve the minimum interconnection capacity threshold necessary for integration of the Spanish, Portuguese and French electricity systems.