Energy Transition in Spain: Challenges and Opportunities

energy transition

Francisco Maldonado Escudero

Global Energy MBA from the University of Calgary

In Spain, as in most countries, energy consumption rests on fossil fuels. Oil and gas accounted for 65% of the primary energy consumed in 2016. The energy transition is boosting clean energies.

Spain imports 99% of the oil it consumes, with 80% earmarked for the transport sector. As to final energy consumption, in 2016 17.3% came from renewable sources generated in the country. Our energy dependence (energy independence was never a sufficiently valued criterion) has moved in the right direction from 82% in 2008 to 72% in 2016, although it is still too high.

The range and magnitude of the source of the energy consumed, as well as its consequences in our quality of life and the environment, is of utter importance in these times of energy transition.

Heading Toward Energy Transition

Europe and Spain are currently defining the energy shifts that will take place from now until 2050, aiming to meet the standards set in the Paris Agreement. The weight of renewable energies and electricity in our energy mix (with an impact on the cost of energy, volume and nature of investments, work opportunities in the energy sector, and the mode of operation of the entire energy ecosystem) are among the parameters being defined; a new clean and safe mobility system, the energy infrastructure network, and the carbon sinks and other forms of carbon capture.

In other words, the changes and policy framework being defined will have a significant effect on our society, as in the case of the monthly energy bill and how to proceed and where will energy companies make their trillion-euro investments. To give you an idea, the Spanish government told the European Union (EU) that investment is expected to reach €236 trillion from 2021 to 2030, 2% of the annual GDP. It is striking that, with all that is at stake, there are barely any debates, discussions or news about this.

Defining an Energy Policy

On June 29, 2018, the Law for Climate Change and Energy Transition was published in the Official State Gazette. The purpose of this law is to promote the reduction of the country’s vulnerability in the face of climate change, with national targets for GHG emissions lowering, renewable energies, and the Spanish economy’s energy efficiency for 2030 and 2050.

In November 2018, the European Commission published a document titled A Clean Planet for All, which outlines a strategy. Similarly, in 2019, the EU approved the Clean Energy for All Europeans package, which details the new framework for European energy policy, challenging energy policies in ways never before seen: according to the level of detail of these energy goals and their deep social impact.

Under the regulations in force since December 2018, the EU requires that each of its delivers a draft National Energy and Climate Plan, defining the goals for 2030 and the path to achieving them. The EU asked for a draft by December 2018 with a final plan expected for December 2019. In June 2019, the EU went over each draft plan and sent observations for each country.

Spain’s Energy Plan

The observations made to Spain include a total of 16 points where Spain’s energy program makes a considerable effort to define the energy targets and policy, to define the measures to reduce emissions in transport, to define the target percentage for renewables in the nation’s energy mix, and the goal to reduce energy dependence. However, it points to a lack of detail as to how we plan to achieve the objectives in each area. That is to say that we set very demanding goals for 2030 but still lack a roadmap explaining how to attain them.

One possible answer is that by defining such high goals, meeting them is not as important as the progress made in the attempt to do so. The problem is that defining these targets will entail passing laws, regulations and game rules that will define trillion-euro investments over the next 10 years and that will define the cost of the energy bill for each Spanish household. Hence, the details matter, and very much so, when it comes to defining an energy framework that gives way to an energy transition that is feasible, non-fictional, solid, that adds (instead of destroying) value. In Spain, we have already experienced the high cost of changing the rules of the energy game.

Outstanding Recommendations

To do so while complying with EU recommendations regarding our National Energy Plan will require defining the key energy sources in this transition, based on the existing know-how and technology; a clear, precise, realistic, and feasible definition of the evolution of different energy sources in time, with an adequate level of detail to prove feasibility; a detailed roadmap for the different energy sectors, many of which will be significantly affected; preparing the research & development programs necessary for this energy transition, among which the EU highlights carbon capture and storage (CCS), and laying out what the EU is asking for and what this country has never been able to successfully carry out in a significant manner: reducing dependence on energy imports (which entails increasing domestic production) in a manner that is consistent with the evolution of the energy sources defined in the nation’s plan.

All this requires that the Spanish government will be supported by all interested parties and particularly expert energy technicians that help realize a realistic and feasible transition. The regulators, energy companies in different areas, consumer organizations, environmentalist organizations, etc., should be included in the definition of the plan as to make it demanding, possible, solid, and creator of value within our economy and society. And we only have until the end of the year.

For more information, check Energía16

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