In its latest Energy Policy Review of Spain released on 26 May, the International Energy Agency (IEA) says Spain has made considerable progress towards its goal of reaching net zero emissions by 2050, but future gains need to be supported by stable policies, adequate public financing and incentives for private investment.

Spain’s 2050 objective for national climate neutrality calls for renewables to provide 100% of electricity and 97% of the total energy mix. The country’s energy policies are centred on massive deployment of renewable energy, energy efficiency, electrification and renewable hydrogen. This entailed phasing out both coal-fired and nuclear power plants. NPPs currently account for more than a fifth of Spain’s power generation.

The 208-page IEA report notes that Spain is progressing toward its 2030 targets, especially in the electricity sector. After a slump between 2013 and 2018 due to a lack of financial incentives, investments in renewables took off again starting in 2019. The share of renewables in the national electricity mix grew from 33% in 2010 to 44% in 2020.

“The foundations for Spain’s energy system transformation will be laid this decade, said IEA Executive Director Dr Fatih Birol.. “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. I hope this report will help Spain navigate its path toward a clean and efficient energy system and a net zero future.”

The report says Spain’s progress on ramping up renewables in its electricity mix is commendable, but that “the future trajectory of its power mix warrants careful consideration to ensure a smooth transition”. As to the phase out of coal and nuclear, it says: “The coal phase-out appears well on track, with coal only providing around 5% of electricity generation in 2019 and even less in 2020. Nuclear power, which accounted for 22% of power generation in 2019 (and an important source of low-carbon generation), will begin shutting down from 2027.” It notes that four of Spain’s seven nuclear reactors are scheduled to close by the end of 2030, representing around 4 gigawatts of capacity.

Natural gas combined-cycle plants provide around one-third of power generation, “and will be crucial to balancing out a power system that is heavily dependent on variable renewables once coal and nuclear have left the market”. The government will need to pay special attention to prevent natural gas generation capacity from simultaneously exiting the system. “In this regard, the government should thoroughly assess the cost implications for consumers of the expedited phase-out of both coal and nuclear generation.”

IEA says that, although the new policies and increased electrification will reduce Spain’s import dependency, “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.”

The report looks at Climate Change Policies, energy efficiency, electricity transition, energy system transformation and energy security and makes four general recommendations. These are that the government should:

Ensure that the National Recovery and Resilience Plan supports achieving the NECP’s targets.Improve co-ordination 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. 

A 40-page chapter on the Spain’s nuclear sector describes nuclear policy, NPP operation, fuel supply, decommissioning & radwaste, and research & development. It notes: “Over the past half-century, Spain has developed a well-integrated and efficient nuclear infrastructure including seven operating NPPs, a fuel manufacturing facility, solutions for decommissioning of nuclear facilities and the management of radioactive waste and spent nuclear fuel, and efficient regulatory institutions. The performance of operating NPPs is excellent, maintaining high-capacity factors of around 90% for the last decade. Currently, nuclear energy produces about 20% of Spain’s total electricity, contributing to the security of supply, reduction of greenhouse gas emissions and diversification of energy sources.”

IEA says Spain has developed a wide range of nuclear technological competencies since the 1960s, from NPP construction and operation or nuclear fuel fabrication to radwaste and used fuel management. Its current national nuclear R&D activities focus on radioactive waste management and decommissioning, in line with its policy to phase out nuclear by 2035

The report’s four recommendations to the government with respect to the nuclear sector are that it should:

Closely monitor the financial situation of NPPs to prevent unforeseen or sudden final shutdown that could significantly deteriorate the security of electricity supply.Pursue timely implementation of the back-end strategy, including the centralised storage facility and the deep geological repository, to avoid unnecessary cost escalation for NPP decommissioning and radwaste management, including final waste disposal.Develop projects that could enable the effective preservation and transfer of knowledge and expertise using current technical infrastructure and highly skilled workers as well as the institutional advantages of Enresa in the NPP decommissioning business.Consider the usefulness of nuclear energy, including for non-electricity applications, for diversifying technical options to achieve long-term carbon neutrality by 2050.

The IEA says “nuclear technology is considered to have great potential to contribute to decarbonisation of not only the electricity system, but also hard-to-abate sectors, such as manufacturing and transport, through high-temperature heat supply and hydrogen production”. It concludes: “Given the great challenge for achieving

carbon neutrality in 2050, the high level of nuclear technology infrastructure and skilled professionals in Spain could be utilised more effectively for developing and implementing long-term energy strategies.”

Date: Friday, 28 May 2021
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