The Spanish gas lobby is calling for urgent support amid the renewable energy boom

Spain should support its domestic natural gas-fired power plants to be able to supply electricity when needed, and such regulation is “urgent and necessary”, says the president of Spanish gas industry association Sedigas.

The so-called capacity mechanism would pay gas-fired power plants to be available to generate power when needed, amid a rapidly growing share of intermittent solar and wind power generation.

“We hope that the regulation enabling the implementation of production mechanisms can quickly come into force,” Sedigas president Joan Batalla said on Thursday, quoted by Reuters.

According to Batalla, gas-fired power plants could provide the necessary baseload capacity in the event of lower renewable energy production. Gas power plants have become more expensive to operate as they are now in standby, startup or shutdown mode most of the time, the official added.

Earlier this year, energy prices in Spain fell to a fraction of those in neighboring France in February, as record wind and solar power production in Spain caused prices to fall dramatically.

Cheap energy prices hurt the profits of Spanish utilities but were a boon for consumers as retail prices reflected lower wholesale electricity prices.

Last year, renewable energy sources accounted for 50.8% of Spain’s electricity mix, up from 42.2% in 2022.

More than half of the electricity consumed in Spain today comes from renewable energy sources, and total renewable energy production exceeded 135,000 GWh last year, up from 116,695 GWh in 2022, Energy Transition Minister Teresa Ribera he said in December.

Over the past 10 years, Spain has made significant investments in solar and wind energy, while hydropower, which has been the largest source of renewable energy in Spain, now produces around 10% of total production.

According to Rystad Energy, Spain has overtaken its European counterparts in terms of solar and wind capacity utilization in 2023, securing the second position in onshore wind installations.

While Germany maintains dominance in onshore solar and wind, “Spain’s solar and wind trajectory shows extraordinary growth prospects for the coming years,” Rystad Energy said.

Author: Michael Kern for Oilprice.com

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