“The more renewables are installed, the more they harm themselves,” say sources in the photovoltaic sector. It is the great paradox. The cannibalization of prices. The large volumes of renewable energy produced at once reduce expensive gas power and thus lower the overall price for that period. Promoting renewables has thus proven to be a double-edged sword.
The problem can be aggravated considering that the Administration is processing 40 GW of new solar installations (which have already obtained a favorable environmental impact statement), that is, twice the amount already installed (19 GW). Practically, there is already enough solar energy to meet the integrated national energy and climate plan (Pniec) by 2030.
And all this has an impact on the investors’ charts of accounts. Photovoltaic solar parks are promoted thanks to bank loans; and if that economic retribution falls, the repayment of these credits is complicated; This constitutes a great challenge for developers, who will have to overcome it, for example, by asking for longer-term amortizations.
The situation of tension will be accentuated in the future with the growth of production with renewable sources, if the demand is not accompanied by growth with new sectors that are electrified. The low remuneration can be a reason that makes developers feel unmotivated when facing new investments, a perspective of low prices, especially for photovoltaics.
Now the problem of stoppages and insufficient pay occurs in spring and autumn, but in two years it can also occur in summer. “In a future with more renewables, there is a greater risk that remuneration will become cheaper and there will be a slowdown in these investments until electricity supply and demand are rebalanced,” says Salvador Salat (UnefCat).
Assumpta Farran, General Director of Energy of the Generalitat, explains that the rapid process of creating renewable facilities and that the electricity produced comes out at zero price “is something that cannot be endured.” She maintains that we are a country that is very given to launching into creating an abundant supply (without planning to dose it) and not thinking so much about demand. “It has been seen in the creation of AVE stations, or gas infrastructures, or the Castor gas warehouse,” she explains.
Given the drop in remuneration and market fluctuations, solar developers point out that a solution may be bilateral contracts (PPA) with clients, such as large companies, which allow long-term guaranteed income, even if it is at a lower but more secure remuneration.
“It is frustrating to see how everything that has been done to decarbonise the electricity sector with investments in renewables has not had the same translation in other sectors, in which almost no progress has been made,” adds Heikki Willstedt, representative of the Business Association Wind.
The associations of the sector estimate that the energy transition cannot rest only on the electrical system, which contributes 13% of gas emissions. His argument is that in the energy sphere, only combined cycle thermal plants (gas) and cogeneration in the industrial sector remain to be decarbonised, while the large pending sectors continue to be transport (electric vehicles) or heating (heat pumps). .
Transport in Spain is the sector with the greatest weight in gas emissions (29.6% of the total); and, within this, road transport accounts for 27.8% of total emissions, according to the national gas inventory of the Ministry for Ecological Transition.
The energy sector has reduced CO2 emissions by 68% between 2005 and 2021, going from 112 million tons to 35.9 million. On the other hand, in the case of transport, the decrease in that period was 16%. If you want to advance in the energy transition and not waste indigenous renewable resources, policies are necessary that do without gas and fossil fuels to be replaced by renewable electricity, say these experts.
