According to the International Energy Agency’s latest country report on Spain, energy security is one of Spain’s key risk areas as the country transitions to a cleaner energy system.
The IEA report states that the rapid closure of coal and nuclear facilities over the coming decade bears watching, as it could increase the country’s call on natural gas, especially if new renewables capacity cannot be built as quickly as planned.
Although Spain continues to be heavily dependent (73% dependency) on foreign sources for its energy, its sources for oil and gas are relatively well diversified and the government has robust emergency response frameworks in place in the case of a disruption.
Spain’s current system is backed up by massive stocks of oil, gas and coal that can be dispatched in a flexible way; the new system, with a large share of variable renewable generation, will require other forms of longer-term backup, on top of short-term flexibility. New vulnerabilities will also arise, as electrification goes hand-in-hand with smartening of the system and digitalisation.
Interconnectivity with other European countries is also a critical element for Spain to improve security of supply, says the IEA. While electricity projects with Portugal are progressing, existing interconnection with France is often congested and new projects have been delayed, causing Spain to fall short of its EU interconnectivity targets of 10% by 2020 and putting at risk its 15% target by 2030.
Between 2013 and 2018, Spain experienced a slump in renewable development due to a lack of financial incentives. Government is now committed to correcting any clean energy deficit by putting sound policy behind the expansion of renewables installations in homes and businesses, as well as promoting the use of renewables for industry and heating. It also intends to support the production of advanced biofuels, renewable gases, and hydrogen, according to the IEA report.
In order to reach renewable energy targets while ensuring security of supply, the IEA made the following recommendations in the country report:
- Ensure that the National Recovery and Resilience Plan supports achieving the NECP’s targets;
- Improve coordination with regional authorities and municipalities to implement the NECP’s measures, especially on energy efficiency, more effectively;
- Reinforce efforts to create more flexibility in the electricity market and to ensure proper price signals for investments in generation, through increased interconnectivity, continued integration of regional markets, and the development of demand-side response and storage;
- Review taxation to avoid excess charges and distortionary impacts on electricity relative to oil and gas consumption to promote electrification. Consider additional carbon-based taxation as well as other mechanisms to progressively redistribute electricity charges among all actors in the energy system.
“The foundations for Spain’s energy system transformation will be laid this decade. Notably, the current economic recovery from the COVID-19 crisis presents Spain with an important opportunity to frontload clean energy investments over the next year three years,” said Fatih Birol, the IEA Executive Director. “I hope this report will help Spain navigate its path toward a clean and efficient energy system and a net-zero future.”
The full report is available on the IEA website.