By Joaquín Robles
Joaquín Robles is a Bachelor in Business Science, with a specialization in Private Banking and Financial Counseling by the I.E.B. He is also an Account Manager at XTB
We are becoming increasingly aware of the problem posed by climate change, although some still insist on denying it. Its impact on the environment is more than obvious and, despite being aware of the need to initiate a process of gradual energy transformation, there are many complexities delaying this necessary transition.
Energy transformation entails substituting the current energy model, characterized by the use of conventional energy generated in large power plants, such as thermal and nuclear, with renewable energies, in order to advance in the fight against climate change, protect peoples’ health, and reduce economic risks. This new model would facilitate more predictable and affordable pricing and could help reduce the geopolitical tensions that come with a model based on energy dependence.
Despite Spain’s investments to promote green energy over the past years, we are still far from becoming a sustainable economy based on renewables. The distribution of energy consumption in Spain is currently led by oil (40.3 percent), followed by natural gas (18.5 percent), coal (10.7 percent), nuclear (9.6 percent), hydro (4.7 percent), and renewables (16.2), far from the goal to increase green energy generation to 20 percent by 2020.
Although this figure may seem low – if we consider the emphasis put on energy transition in Spain – this nation is actually above the European average, which stands at 14.3 percent, and even higher as compared to the global average, standing at 2.8 percent. The European Union holds a 37.7 percent share of renewable power and has the most ambitious plans to transform the current energy model.
Over the next years, Spain must draft a new energy plan stemming from the Paris Agreement, which aims to reduce GHG emissions in sectors such as energy production, transportation, and construction by 2030 and 2050. The big problem lies in preparing a plan that has the support of major political parties and determines the best way to substitute nuclear power, nowadays highly relevant, for renewable energies in a sustainable manner.
Although the European majors have good intentions, they still lack the determination and commitment to comply with the 2030 objectives for energy transformation and limiting the rise of the global average temperature to well below 2°C above pre-industrial levels.
In 2015, the use of coal, oil, and gas in electricity generation stood at over 30 percent in European countries, reaching 60 percent in the case of Italy and 90 percent in Poland.
We are still far from the ambitious agenda proposed for 2030, and one of the main causes is the excessive power that majors in the energy industry have on their countries’ Administrations, pressing to carry out a much slower transformation process.
The Spanish case is even more serious since there is no scheduled date to shut down coal-fired power plants – as opposed to other countries in the EU – and subsidies for coal production have been extended until 2018, standing as one of the countries to show the most support for this sector. Furthermore, authorities cut subsidies for renewable power and implemented a tax on self-consumption, going against the nation’s commitment to its European partners.