Spain records surplus energy production

SPAIN - Spain has managed to achieve electric power production of almost double the country's domestic peak demand. Spain has reportedly achieved an installed capacity of 90,000 megawatts (MW), primarily due to mushrooming renewable energy ventures, which accounted for about 21,921 MW of power generation in 2008.

The impetus and incentives offered for projects in the renewable energy sector have boosted the contribution of the sector from 11,004 MW of output in 2004 to the current levels. As part of its energy policies, Spain has also diversified into the development of the liquefied natural gas (LNG) sector. Wind and solar energy projects are major contributors to this surplus scenario, catapulting Spain to the third and second positions in the respective energy sectors globally. These renewable energy projects have also been successfully linked to national electricity grid.

At the end of 2008, installed capacity of the country's solar-power ventures stood at 3,404.8 MW, with about 1,000 MW having been added in 2008, while wind energy capacity was 16,740 MW, with 1,609 MW being added last year alone. Installed capacity of small-hydro ventures ( Half of Spain's power requirements, which peaked at 43,000 MW, are still met in part by energy ventures running on fossil fuels. However, in order to meet the climate targets established by the European Union, the country is required to cut down on CO2 emissions in the power and transport sectors in particular. Reducing peak demand by implementing energy-efficiency measures is one of the critical action points for Spain.

Although the current spare energy levels are sufficient to phase out nuclear and coal-based ventures in the country, stability and sustainability of renewable energy ventures will have to be considered before deciding on replacements. Owing to excess capacity and a recent decrease in power consumption, the country has sufficient power to target export markets in Morocco, Portugal and France, but Spain's recent reduction of incentives for solar power ventures has once again raised questions regarding the financial viability of subsidizing renewable energy ventures.

Limited incentives for solar ventures in Spain have created ripples across the globe, impacting the sector throughout the world. With the country choosing to subsidize only 500 MW of ventures in 2009, compared to 2,400 MW in 2008, it remains to be seen if similar actions will occur in the wind energy sector.

According to current plans, an additional 1,600 MW of wind energy is expected to be added to Spain's power output in 2009, with a target of 20,000 MW of wind power capacity by 2010. Long-term forecasts indicate targets of about 40,000 MW and 5,000 MW of onshore and offshore ventures, respectively, by 2020, catering to 30% of the domestic power requirement of the country. The remuneration and policy framework governing wind energy projects will need to be refined and finalized before progressing to this level.