Montel Magazine 2 2021 - Border control - Page 24

Green

expectations

Spain ’ s ambitious plans to decarbonise its power sector may be scuppered by its own market saturation .
By Rachael Burnett
Spain is a leader in European power purchase agreements ( PPAs ) and has around 100 GW of renewable energy projects in the pipeline , thanks to its plentiful sunshine and steady winds . And PPA prices in Spain are relatively low compared to many other European nations , making them attractive for large corporations looking to lock in years of green power supply .
The country witnessed a flurry of PPA activity last year , notwithstanding the coronavirus pandemic , with signed deals totalling 3.4 GW out of 8.9 GW across Europe , according to Pexapark , a renewables software platform specialising in PPAs . Germany is the most liquid market in Europe with a large number of strong offtakers and has the potential to challenge Spain ’ s position in 2021 , it added . This trend has continued in 2021 amid a rise in demand from corporates , including pharmaceutical firm Novartis , technology giant Amazon and food company Danone .
But some industry experts warn that Spain ’ s oversized pipeline of renewable energy projects will flood the power system , meaning some will languish in the planning phase . So far authorities have granted grid connection rights to 131 GW of green projects . But around 80 % of these
24 projects at early stage development are “ very unlikely ” to go forward , says Javier Revuelta , senior consultant at energy management consultancy Afry . He predicts a 3-4 GW annual net increase over the next five years , including repowering and end of life projects .
“ Only a fraction of the projects with grid connection rights are likely to be completed ,” says Ana Barillas , principal of Aurora Energy Research for Spain . “ That assessment is largely based on the capacity that we think the power system can absorb . It is not based on a detailed analysis of the risks facing individual projects or even groups of them ,” she adds .
Aurora expects an average buildout rate of around 3.5 GW per year over the next nine years . “ We see that slow down a bit over time as the market becomes more saturated with renewable generation .” Spain ’ s renewable capacity will expand rapidly in the coming decade but with modest results in comparison to the pipeline . Barillas expects solar capacity , including solar thermal , will reach 34 GW by 2030 , with wind increasing to 40 GW .
Montel Magazine 2 – 2021