Spain's Struggle to Meet Demand

Despite a programme of modernisation, the Spanish electricity industry continues to suffer from system failures. Fleur Doidge looks at the state of play so far.

On 23 July 2007, lights went out unexpectedly across Spain's second city Barcelona and the Baix Llobregat region. Power wasn't restored by the authorities for two whole days.

It wasn't just the lights that went out. Power to transport, businesses, hospitals and homes – accounting for some 300,000 customers – were all affected.

One faulty substation cable was believed to be the culprit. Spanish industry minister Joan Clos said the cable had caused a chain-reaction failure in up to six other substations. That outage coincided with two urban transformer fires at Avenida Josep Tarradellas and Paseo Maragall, according to media reports at the time.

INDUSTRY IN FLUX

Local failures will happen – no matter what the overarching regime. However, Spain's power industry is changing rapidly in line with demand growth.

It's not implausible to suppose that the move to a competitive Iberian market – uniting Spain and Portugal – and Spain's own internal political imperatives imposes pressures of its own. Ultimately, Iberia will merge completely with the burgeoning European electricity market, but until then the industry is in flux.

Spain's national energy regulator is the Comisión Nacional de Energia (CNE). Market operator Mercado de Electricidad (OMEL) coordinates a series of organised wholesale markets. Bilateral physical contracts are allowed and retailers to qualified consumers, subject to administrative authorisation.

System operator Red Eléctrica de Espana (REE) is responsible for the security and reliability of the 400kV and 220kV transmission grid. Under REE and its grid associates are distributors Iberdrola, Unión Fenosa, H Cantabrico, E Viesgo and Spain's largest power company, Endesa.

In 2007 CNE reported annual Spanish electricity production totalling 233TWh in 2002, of which 9.3% was from hydroelectric generation, 27.1% nuclear, 35.9% coal, 13.1% oil and gas and 14.6% special regime in origin.

Spain boasts 59GW of installed capacity, of which 28.3% was hydro, 13.3% nuclear, 19.7% coal, 18.8% oil and gas and 19.9% special regime. Demand peaked at 34.3GW and maximum energy consumed was 690GWh in 2006.

The special regime incorporates production installations that use cogeneration, renewable energies – solar, wind, geothermal, energy from waves, tides and hot and dry rocks, hydropower and energy from biomass – and waste to generate electrical energy.

Latest CNE figures were for January–December 2006. For the whole production market, a total 156,091GWh of electricity were traded – 32.4% less than 2005. January 2006 saw a high of 19,945GWh traded, followed by 17,943GWh in February. April and May were low months and saw 7.8GWh each traded.

Power left over was mainly exported to Portugal, accounting for 7.2GWh to that country in 2006.

"The volume of energy exchanged throughout the year totalled 20.4GWh, 15.3 % more than in 2005. Imports remained at a similar level to the previous year, some 8.8GWh, but exports were up to around 11.6GWh, 2GWh more than in 2005," CNE wrote.

A 2007 report by industry analyst RNCOS on the Spanish energy industry found that total energy consumption reached 165 million tonnes of oil equivalent in 2006, with oil and gas remaining the main sources of energy. Spain, once considered self-sufficient, is today a net energy importer, with imports accounting for 99% of its total annual oil and natural gas consumption and 50% of its coal consumption.

"To ensure supply diversity, Spain aims to reduce its dependence on oil and gas, which will offer immense opportunities for renewable energy sources," RNCOS said in its report. "Especially in wind energy indices, Spain remains the most attractive market. Security and diversity of energy sources remain the major driving force."

Meanwhile, nuclear power in Spain is in limbo, with the government offering nuclear power companies annual payments to hold off on further developments. Lemóniz, Valdecaballeros and Trillo II Nuclear Power Station developments, through companies Iberdrola, Sevillana, Unión Fenosa and Endesa, received a total €4,383m of compensation in 2006, according to CNE.

RENEWABLES RACE AHEAD

CNE reported that Spanish special regime power generation hit 50,000GWh or close to 20% of supply in 2006. This was mostly due to renewables, with cogeneration and biomass decreasing slightly. A European directive mandates renewable energy sources to account for 29.4% or 25,716MW of Spanish gross electricity consumption by 2010.

"There is still a notably spectacular growth in wind generation, with an installed capacity of close to 12,000MW," the regulator reported.

"Sales of electricity from renewable energies during 2006 were over 29,000GWh, representing approximately 12 % of gross electricity demand. That figure goes up to 19% if major hydro production is included. This share is mainly due to the increase recorded by wind energy combined with the relatively low hydro conditions throughout the year."

Renewable energy expansion is further encouraged by 2006 legislation on emissions trading, based on European Community requirements around the Kyoto Protocol.

Average emissions 2008–2012 cannot exceed base year emissions by more than 15%. Spain is working to achieve this while preserving competitiveness, budget stability and employment in the Spanish economy, CNE wrote.

Recent figures from CNE are currently unavailable. However, a March 2008 report from international newswire Reuters said Spanish wind turbines topped all previous records providing 10,032MW on one day, beating the 9,563MW record set 16 January – with REE cutting output to protect against the wind dropping.

SOLAR ADVANCES

Spain has also moved to develop its solar energy resources. Europe's first commercial-scale concentrating solar power (CSP) plant was inaugurated last year near Seville. The 11MW PS10 plant can generate 23GWh a year, using 624 movable mirrors or heliostats that concentrate sun rays for greater efficiency.

PS10 has been designed to supply a population of 10,000 and prevent about 16,000t of CO2 emissions each year, according to analyst firm IHS Energy.

More generators producing a total 300MW are slated for construction near Seville, in the southern Spanish state of Andalucia, by 2013.

PREVENTION OVER CURE

Reuters reported REE as saying a best-case scenario would be to compensate for any such sudden drops in wind production by importing French energy. However, Spain's current powerlines do not yet have sufficient capacity to achieve this goal.

"Combined cycle gas plants meanwhile satisfied 25% of demand, nuclear power 20%, coal 14% and hydroelectric stations just 2%," said Reuters.

"The remaining 11% was accounted for by small producers supplying less than 50MW from sources such as cogeneration or biomass."

Droughts in 2007–2008 reduced the contribution of Spanish hydro and the nation, currently claiming to be the world's second-largest producer of wind energy, was becoming more dependent on its wind farms.

"[Spain's] power market has become particularly sensitive to fluctuations in wind," Reuters reported.

"The grid said its decision underlined the need for a new power line to be built across the eastern Pyrenees, which would allow up to six% of maximum installed capacity to flow to and from France."

EU recommendations are for around 10% and a route for a new Spain-France power line is to be decided in June, Reuters said.

REE and Réseau de Transport d'Electricité (RTE) agreed in January to jointly construct a new line between the substations of Santa Llogaia, Spain and Baixas, France.

"The construction of this new interconnection will contribute to increasing the safety of both electrical systems and guarantee greater energy support between them," REE said in a statement.

"It will also favour the integration of a higher volume of renewable energy production, especially wind energy from the Iberian system, which will contribute to reaching the European objective of covering 20% of energy consumption through renewable energies."

It is certainly conceivable that lack of capacity may have contributed to shaky supplies across Spain, including the July 2007 outage in Barcelona. As yet, authorities in Spain have not responded to requests for clarification or further information.