Spain Power Report Q1 2012
Includes 3 FREE quarterly updates
BMI View: Spain is considering a nuclear and renewables-based future rather than continued dependence on fossil fuels, but there is resistance to the building of new reactors. The previous Spanish government in early 2011 approved an amendment on nuclear energy, which removes the statutory 40- year limit placed on the operating life of a nuclear power plant. This probably is not the end of the story as, in a post-Fukushima world, the public will fight hard to thwart government pro-nuclear policy. A change of government in November 2011 also means a potential shift in policy. Renewables potential is considerable, but Spain will be making good use of its Algerian gas imports over the next several years. Thermal resources have always played a central role in Spain's ability to generate power and we expect gas in particular to gain ground in future, but dependence on coal and oil should fall. Green commitments and diversification goals have prompted a change in the relative weightings of the thermal fuel sources – a transition that is set to become even more noticeable over the forecast period.
Key trends and recent developments in the Spanish electricity market include: During the 2011-2016 period, Spain’s overall power generation is expected to increase by an annual average of 1.96%, reaching 307TWh. Driving this growth is an annual 3.12% gain in gas-fired generation and a 4.86% rise in renewables-based electricity supply. The use of coal and oil in power generation is expected to decline steadily, countered by modest gains in nuclear power and hydropower.
In March 2010, Spain announced that it plans to double power production from renewable energy sources by 2020 to meet its EU commitments, targeting an increase in wind capacity from 20,676MW to 35,563.91MW and an increase in solar capacity to 15.7GW. BMI believes that these commitments are now overly optimistic, considering changes in the incentives available for renewable power schemes. Following an estimated increase in real GDP of 0.7% for 2011, BMI forecasts average annual growth of 1.8% between 2011 and 2021. The population is expected to rise from the current level of 46.5mn to 48.9mn during the period 2011-2021, and net power consumption looks set to increase from 253.6TWh to 283.3TWh by 2016, rising further to 315.2TWh by 2021. During the 2011-2016 period, the average annual growth rate for electricity demand is forecast at 2.02%, but accelerating somewhat later in the decade to an average 2.18% in 2016-2021.
Owing partly to the slow but steady forecast rise in net generation, growth of which just about keeps pace with the underlying demand trend, Spain’s power supply surplus is likely to increase over the longer term as new gas-fired and renewables capacity kicks in. A gradual decline in the percentage of transmission and distribution losses from around 5.2% will help strengthen the market. The country’s theoretical net export capability by 2016 is estimated at 9.6TWh, which could rise by a further 67% before 2021 if investment reaches expected levels.
BMI View: Spain is considering a nuclear and renewables-based future rather than continued dependence on fossil fuels, but there is resistance to the building of new reactors. The previous Spanish government in early 2011 approved an amendment on nuclear energy, which removes the statutory 40- year limit placed on the operating life of a nuclear power plant. This probably is not the end of the story as, in a post-Fukushima world, the public will fight hard to thwart government pro-nuclear policy. A change of government in November 2011 also means a potential shift in policy. Renewables potential is considerable, but Spain will be making good use of its Algerian gas imports over the next several years. Thermal resources have always played a central role in Spain's ability to generate power and we expect gas in particular to gain ground in future, but dependence on coal and oil should fall. Green commitments and diversification goals have prompted a change in the relative weightings of the thermal fuel sources – a transition that is set to become even more noticeable over the forecast period.
Key trends and recent developments in the Spanish electricity market include: During the 2011-2016 period, Spain’s overall power generation is expected to increase by an annual average of 1.96%, reaching 307TWh. Driving this growth is an annual 3.12% gain in gas-fired generation and a 4.86% rise in renewables-based electricity supply. The use of coal and oil in power generation is expected to decline steadily, countered by modest gains in nuclear power and hydropower.
In March 2010, Spain announced that it plans to double power production from renewable energy sources by 2020 to meet its EU commitments, targeting an increase in wind capacity from 20,676MW to 35,563.91MW and an increase in solar capacity to 15.7GW. BMI believes that these commitments are now overly optimistic, considering changes in the incentives available for renewable power schemes. Following an estimated increase in real GDP of 0.7% for 2011, BMI forecasts average annual growth of 1.8% between 2011 and 2021. The population is expected to rise from the current level of 46.5mn to 48.9mn during the period 2011-2021, and net power consumption looks set to increase from 253.6TWh to 283.3TWh by 2016, rising further to 315.2TWh by 2021. During the 2011-2016 period, the average annual growth rate for electricity demand is forecast at 2.02%, but accelerating somewhat later in the decade to an average 2.18% in 2016-2021.
Owing partly to the slow but steady forecast rise in net generation, growth of which just about keeps pace with the underlying demand trend, Spain’s power supply surplus is likely to increase over the longer term as new gas-fired and renewables capacity kicks in. A gradual decline in the percentage of transmission and distribution losses from around 5.2% will help strengthen the market. The country’s theoretical net export capability by 2016 is estimated at 9.6TWh, which could rise by a further 67% before 2021 if investment reaches expected levels.
Contents
Executive SummarySWOT Analysis
Spain Power SWOT
Global Industry Overview
Regional Industry Overview
Industry Forecast Scenario
Spain Snapshot (Macro)
Country Snapshot: Economic and Demographic Data
Country Snapshot: Power Sector
Spain Forecast Scenario
Electricity Generation and Power Generating Capacity
Table: Spain Total Generation Data
Table: Spain Total Generation Data
Table: Spain Electricity Generating Capacity Data
Table: Spain Electricity Generating Capacity Data
Table: Power Reactors Operating In Spain (November 2011)
Electricity Consumption
Table: Spain Total Consumption Data
Table: Spain Total Consumption Data
Transmission & Distribution, Imports & Exports
Table: Spain Electric Power Transmission And Distribution Losses Data
Table: Spain Electric Power Transmission And Distribution Losses Data
Table: Spain Trade Data
Table: Spain Trade Data
Key Policies/Market Structure
Regulation and Competition
Sustainable Energy Policies
Pricing
Table: Electricity Prices In the EU Member States, As Of June 2011
Business Environment
Regional Risk/Reward Ratings
Developed States Power Risk/Reward Ratings
Power Risk/Reward Ratings
Spain Power Rating
Rewards
Risks
Competitive Landscape
Endesa
Iberdrola
REE
Union Fenosa
Company Monitor
Endesa
Glossary of Terms
Table: Glossary of Terms
Methodology And Sources
Industry Forecasts
Power Industry - Data Methodology
Generation and Consumption Data
Electricity Generation Capacity Data
Power Risk/Reward Ratings Methodology
Table: Power Risk/Reward Indicators
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