Spain’s Green Energy Production Sometimes Exceeds Demand: Why Are Some Worried By That?

Castilla-La Mancha, located in central Spain used to be famous for its windmills… as seen in Don Quixote and the phrase, ‘tilting at windmills’.

In recent years however, you’re much more likely to find wind turbines, with the 28 huge turbines of the Sierra del Romeral windfarm being the most numerous.

These turbines are just one part of a huge trend right across Spain for renewable energy… making the country the EU’s second largest second-largest, external renewable energy infrastructure, only being beaten by Sweeden.

In fact, since 2008, Spain has doubled its wind generation capacity, making it their prime renewable source, whilst solar energy capacity has increased by a facto of eight over the same period.

 

“Spain is a driving force of the energy transition on a global scale”

Pedro Sánchez – Spanish Prime Minister

 

That huge push towards clean energy began back in 2018 when Pedro Sanchez was elected, and his party set about removing regulatory obstacles, introducing subsidies for renewable installation and implementing targets such as ensuring 81% if Spains electricity requirements would be covered by renewables by 2030.

 

However… As amazing as that all is, some voices within the electricity sector have raised concerns between an imbalance in supply and demand leading to a surplus of electricity, which could see a reduction in outside investment.

 

Whilst Spain’s economy has bounced back from COVID, electricity consumption has still dropped across the entire country.

Spains demand for electricity last year (2023) was at it’s lowest since 2003, with several reasons being credited with the drop.

 

“What we saw until 2005 was that when GDP increased, demand for electricity increased more than GDP. More recently, we’ve seen that demand has increased less than GDP. What we’re seeing is a decoupling of energy intensity from the economy”.

Miguel de la Torre Rodríguez – Head of System Development, Red Eléctrica

 

Some reasons cited are the recent energy crisis started with Russia’s invasion of Ukraine, increased energy efficiency across the county and the increase of available renewable energy, reducing demand from Spains National Grid (which is ran by Red Eléctrica).

 

During daylight hours, when solar energy output is particularly strong, the supply-demand balance can be pushed out of kilter, having an impact on prices. Since the power system always has to have an equilibrium – demand has to equal generation – that has meant there has been excess generation during those hours. That has driven prices down, especially during certain hours, when the prices have been zero or even negative.”

Miguel de la Torre Rodríguez – Head of System Development, Red Eléctrica

 

Now zero, or negative prices may sound amazing… and for consumers it is; some are worried it could lead to potential problems in attracting new outside investment to the sector.

 

“This can make it more difficult for investors to increase their investment in new electricity based on renewable energies and that can be a bottleneck for the energy transition.”

Sara Pizzinato – Renewable Energy Expert, Greenpeace Spain.

 

These concerns over excess electricity have led on to discussions about accelerating Spains move away from fossil fuels, to the ‘electrification’ of the economy, with the Government setting a target of 34% of Spain’s economy being electricity dependent by 2030.

 

“This process is going slowly, and we need to accelerate it. Electricity is the cheapest and most competitive way to produce clean energy. We need facilities that use electricity in place of fossil fuels.”

José Donoso – UNEF

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