In recent years, Spain has embarked on a massive deployment of new renewable plants and the green revolution causes a shock in the country’s electricity production. The green avalanche will allow the Spanish electricity system to take a historic step this year and for the first time will produce more than half of all its energy with renewable technology installationsexceeding the sum of nuclear, gas and coal power plants.
Spain’s power sector has produced a record nearly 125,300 gigawatt hours (GWh) so far this year, more than in any previous full year, and has grown up to 50.2% of the weight of renewable energies in all electricity production of the country, according to the archives of Red Eléctrica de España (REE). The data corresponds to the production of the entire national electricity system, not only of the peninsula (in which renewable energies are more present, with 52% of production) but also of the Canary Islands, the Balearic Islands, Ceuta and from Melilla.
Never before has the 50% renewable energy threshold been exceeded in an entire year. The previous record was reached in 2021, with 46.7% of the total. The objective of the government of Pedro Sánchez, envisaged in the project to update the National Integrated Energy and Climate Plan (PNIEC) sent to the European Commission, is to produce 80% of electricity from renewable sources in 2030. Until Now, by 2023, electricity without CO2 emissions (the sum of renewables and nuclear) also sets a record, reaching 72% of the total.
Just a few months
Until now, there had been months in which renewable generation exceeded all others thanks mainly to seasonal conditions (months in which wind, solar or hydro generation skyrocketed due to favorable weather scenarios), but this had not been achieved in a full year.
Just over a decade ago, we recorded the first month in which production from renewable power plants exceeded nuclear, gas and coal production. It was April 2013. And in all these years, a total of only 22 monthly payments (out of a total of 127) in which renewable energies were above the others of technologies.
Spain will manage to exceed the threshold of half of its electricity produced from renewable power plants throughout 2023 after its registration Last November, a new historic maximum of 60.2% of energy from green origin and now reached levels above 56% during the first week of December, according to the latest statistical data updated by REE.
The president of Redeia (parent group of REE), Beatriz Corredor, already predicted at the start of the year that the objective of exceeding 50% green energy was achievable for the whole year. It seemed difficult at the time, and today the electricity system is on the verge of making history thanks to the boom in wind and solar power and the relative recovery of hydropower after the downturn of the last year due to drought.
So far this year, wind power is the leading source of electricity generation, at 23.3%; above nuclear (20.2%) and gas power plants (17.4%). Solar photovoltaic plants concentrated 12.4% of production (this figure does not include self-consumption production, which can add around another 2%) and hydroelectric plants, 9%.
More renewable energies, cheaper light
The expansion of renewable energies on the Spanish market and their growing weight in the national electricity production mix not only represent environmental progress towards the decarbonization of the economy, it is also progress for its impact on the reduction of energy prices. Electricity markets reached exorbitant prices at the height of the energy crisis, reaching historic highs above 500 euros per megawatt hour (MWh). Electricity prices have finally managed to moderate in recent months, thanks to cheaper gas and the greater weight of renewable energy production, giving families and businesses some respite.
The wholesale electricity market, also known as a pool, sets prices according to a marginalist system, whereby the newest and most expensive technology needed to cover demand sets the price for all others every hour of the day. Certain so-called inframarginal production technologies (renewable energies, nuclear and hydroelectric) enter the market at zero price.
The greater the production of renewable energy, the easier it is to contain energy prices. This is what is happening now, in combination with falling gas prices and CO2 emission rights. In November, while renewable energies represent more than 60% of all national electricity production, the average electricity market price, of 62 euros per megawatt hour (MWh), was the cheapest since March 2021, before the crisis energy.
However, the electricity sector has warned of distortions occurring due to the immediate collapse in prices. And when the production of these inframarginal energies is sufficient to cover the entire planned consumption, the price remains at zero euros. And this has happened on more and more occasions over the last year: with around 85 hours at zero cost this year.
The renewable energy sector warns of the impact on businesses of this cannibalization of electricity prices. Cannibalization, because it is precisely the expansion of renewable energies which, according to companies, endangers the profitability of green installations – current and future – due to falling electricity prices and which could end up stopping the investments in new developments.