Spain’s Real Energy Problem
Recent murmurings about changing Spanish renewable energy policies have caused serious discomfort within the renewable energy development and finance industry recently. An interesting insight into the Spanish energy industry below explains how the combination of a questionable long-standing energy policy, the slow accumulation of annual electricity cost deficit, EU renewable energy policy requirements and finally the credit crisis has left the Spanish government with few options but to get creative.
The Spanish regulation in question has limited how much electricity rates could rise for homeowners and industry each year over the past decade. As energy costs have surged this has left an annual deficit recently reaching €4bn in one year and finally totaling over €20bn by 2009. This debt was packaged in to securitized debt and sold on the capital markets.
In line with EU renewable energy policy goals, Spain was one of the first to make serious attempts to reach their RE goals. However with the very costly exercise of renewable energy funding, the country´s deficit only worsened. Despite their positive attitude, it seems Spain´s efforts were poorly timed. With the immediate onset of the credit crisis the government was no longer able to find buyers for their securitized debt.
Solar Powered Spain
At a cost of around €1.2bn, the 300MW solar energy plant being developed in the Andalucian countryside may eventually deliver enough energy to power 180,000 homes - the size of Sevilla itself.
Solar Thermal Electricity Generation is a far cheaper / kwh electricity generation method than photo-voltaic cells therefore this technology is certain to thrive in hot sunny environments with plenty of land. Mirrors track the sun’s path during the day, reflecting the light to a central tower at which point the thermal energy heats water pipes which in turn drive turbines to generate electricity. Whilst the technology is still being perfected, and STEG systems can only last up to 25 years, this will certainly be a major player in the future.
In Andalucia, various technologies are combined for the power plant, from low and high concentration photovoltaic to tower thermoelectric and parabolic-trough collectors. The PS10 solar power plant uses 624 enormous mirrors reflecting light to a central 115m high tower. Already under operation this system is working well and delivering electricity to Seville. An additional 1000 of these 120sqm mirrors are being installed to concentrate solar beams on a larger 165m tower. An additional 154 photo-voltaic receivers are also being integrated to deliver more power to the system before it reaches maximum capacity in 2013.
With enormous tracts of land available for energy development projects, Spain is already the 2nd biggest producer of Wind Energy in Europe, and as the sunniest country in Europe with several global solar-power leaders based here, Solar Power energy in Spain is already becoming very big business. Abengoa Solar is the Spanish company behind this development project, who have installations in America and North Africa also.
Spain sets new Wind Output record
For a few hours last week Spain’s mainland wind farms produced over 40% of the national electricity demand. Fierce winds swept across the country delivering over 11GW of energy at one point during the morning.
Spain is rapidly leaving the rest of the world behind in its wind energy output, continuously adding more wind farms to enhance its overall energy production. So far in 2009, almost 12% of Spanish electricity demand has been supplied by the nations wind farms.
With hydro-electric stations and rapid growth within its Solar Power stations also, Spain is rapidly progressing towards achieving 30% of national electricity demand from renewable energy sources by next year, and 50% by 2020.