Macroeconomic Impact of Renewable Energies in Spain - Javier Alberto Munoz Gonzalez

Macroeconomic Impact of
Renewable Energies
in Spain
Javier Alberto Muñoz González
Communications Director, APPA Renovables
Madrid, January 9, 2018

Texas Tech University – January 20182
INDEX
1. What is APPA?
2. Global Energy Context
3. Spanish Energy Context
4. Macroeconomic Impact of Renewable Energies in Spain
5. The Future of Renewables in Spain and Europe
6. Conclusions

1 – What is APPA?
APPA: 30 years working for renewables
 The Association of Companies of Renewable Energies (APPA) groups companies and
entities whose purpose is the use of renewable energy sources in all its forms.
Established in 1987, APPA is the leading association of the renewable energy sector in
Spain.
 Sections:
 APPA collaborates with public and private entities:
 Comisión Nacional de los Mercados y la Competencia (CNMC).
 CIEMAT (Centro de Investigaciones Energéticas, Medioambientales y Tecnológicas).
 Comité de Agentes del Mercado de la Electricidad (OMIE).
 Miembro de Comités de AENOR, ENAC, etc.
 Otras entidades públicas (agencias autonómicas de la energía, centros tecnológicos, etc.).
 Geothermal (High Enthalpy)
 Geothermal (Low Enthalpy)
 Sea Energy
 Biofuels
 Biomass
 Wind Power
 Small Wind
 Mini Hydro
 Solar PV

 Presence in Europe:
 Integrated in:
• AEBIOM  European Biomass Association.
• EBB  European Biodiesel Board.
• EGEC  European Geothermal Energy Council.
• EREF  European Renewable Energies Federation.
• EUFORES  European Forum for Renewable.
• EU-OEA  European Ocean Energy Association.
• WindEurope  European Wind Energy Association.
• GIA  Geothermal Implementing Agreement.
• SPE  Solar Power Europe.
 Also, representation activities before European
institutions and European Parliament.
1 – What is APPA?

 Legal and technical advice to associates.
 Development of reports and organization of technical work groups.
 Provides specific information to associates:
 Internal communication:
• Daily news clipping.
• Internal bulletin: legal provisions, ministerial meetings, conferences…
• Sectoral information flashes: immediate information on regulatory and administrative
changes, alerts, etc.
 External communication:
• Collaboration and participation in seminars and conferences in the energy sector.
• Web (www.appa.es), Facebook (APPA.Renovables) y Twitter (@APPA_Renovables).
1 – What is APPA?

1 – What is APPA?

Energy Consumption
Consumption of energy in the world grows in an unsustainable way.
We must act on this energy demand, since it is fundamentally covered with fossil
resources wich, among other aspects, are finite and produce harmful effects on
the environment
Only in 2006-2030, world energy demand will grow 45%

Due to the consumption of fossil fuels, emissions of greenhouse gases are growing
exponentially, causing adverse effects on the environment.
In recent decades, carbon emissions into the atmosphere are uncontrolled
Energy Consumption

Only 19% of the energy we consume globally comes from renewable sources, of
which about half comes from the use of traditional biomass.
It is urgent that we act on the uses we make of energy,
the current system is unsustainable
Worldwide renewable energy

In the same way, 23% of the electricity consumed globally comes from renewable
sources, of which about 75% comes from the use of hydroelectric power plants.
Only 7.3% of the electricity consumed worldwide comes from
"modern" renewable technologies.
Worldwide renewable electricity

This unsustainability of the world's energy system is mainly due to the following
factors:
• It is based on the consumption of fossil fuels.
• It is about finite resources that tend to disappear.
• These fuels produce adverse effects on the climate.
• Our energy dependence increases, mainly from politically unstable countries,
which translates into a vulnerability of our economies.
• It fosters energy poverty (more than 1.5 billion people do not have access to
electricity).
• The more we use fossil fuels, the greater the economic cost of their use.
Renewable energies are the only option to fight against these effects, they are
respectful with the environment and reduce our energy dependence
Unsustainable energy system

Installed / dismantled power in European Union
Fuente: WindEurope año 2015
In 2015, 77% of the installed capacity has been renewable technologies,
while more than 17 GW of traditional technologies have been dismantled
Electricity power in European Union

Electric power installed in the EU
During the last years the percentage of new renewable power in the EU has grown.
Fuente: WindEurope año 2014
Annual installed power in EU

2016 2020 2030 2050 2100
20%
20%
20%
40%
27%
27%
80 - 95%
2ºC
European directives have been key to the development of the
renewable sector in Spain and will be for the future
Weather EU Goals

Beyond 2020: Roadmap 2050 => Goal: Europe decarbonization
Our country is in a privileged position to reach
the objectives that EU is proposing for 2050.
 Decarbonization is technically and
economically viable.
 Energy efficiency and renewable
energies are crucial.
 An early investment scenario will be
more economical by reducing our exposure
to higher prices.
 We need economies of scale.
EU works on the goal of reducing emissions by more than 80% by 2050, energy
production in Europe will not have to emit virtually carbon. Main conclusions:
European Directives

Countries with renewable policies and objectives in 2005:
Fuente: REN21 – Renewables 2015 Global Status Report
In 2005, South America, Africa and Eastern Eurpe, hardly had renewable policies
Renewable policies and objectives in the world

Countries with renewable policies and objectives in 2015:
Fuente: REN21 – Renewables 2015 Global Status Report
At the beginning of 2015, a total of 164 countries had
defined renewable objectives Why this change?
Renewable policies and objectives in the world

Texas Tech University – January 201819Fuente: Banco de Inversión Lazard Noviembre 2015
In the last 7 years, wind and photovoltaic solar technologies have reduced
66% and 85% costs respectively (updated 2016).
- 61% - 82%
Competitivity and cost reduction

Texas Tech University – January 201820Fuente: Banco de Inversión Lazard Noviembre 2015
Development and cost reduction: the chicken or the egg?

The levelized costs of renewable energies are competitive with traditional technologies,
even in some cases lower. Is the cost reduction sufficient?
Fuente: Banco de Inversión Lazard Noviembre 2015
Competitivity and cost reduction

Spain is ranked 25th in the world ranking while
that in the year 2007 it occupied the first place.
How do you get to be an attractive country?
Fuente: RECAI Issue 45 – September 2015
Renewable Energy Country Attractiveness Index (RECAI)

The attractiveness for investments depends on the regulatory framework
Investment Attractiveness – Spanish case

Texas Tech University – January 201824Fuente: REN21 – Renewables 2016 Global Status Report
In 2015 less developed countries invested more in renewables than rich ones
Global renewable investment 2004-2015

138.5 GW of new renewable power:
+ 9% over 2015
-23% investment -> Cost reduction
2016 Figures

2016 Figures - Renewables

Previsión IRENA: 24 M empleos en 2030 (+145%)  14,2 en 13 años (1,1 M/año)

Texas Tech University – January 201830Fuente: BP Statistical Review of World Energy 2016
Primary Energy Consumption 2015 - Worldwide

Texas Tech University – January 201831Fuente: BP Statistical Review of World Energy 2016
Primary Energy Consumption 2015 - EU

Texas Tech University – January 201832Fuente: MINETUR
Primary Energy Consumption 2015 - Spain

Texas Tech University – January 201833Fuente: MINETUR
Primary Energy Consumption 2008-2015 - Spain

Texas Tech University – January 201834Fuente: IDAE y MINETUR
 Producción eléctrica total: 280.481 GWh (+1%)
 Producción renovable: 96.958 GWh (-11,8%)
 Contribución renovable: 34,6% (39,6% en 2014)
Electrical Generation 2015 - Spain

Texas Tech University – January 201835Fuente: REE, CNMC y elaboración propia
Electrical Power 2015 - Spain

CONSUMO  Final energy: 85.874 ktep (+1,5%)
 Renewable contribution: 15,9% (14,7% en 2015)
Fuente: MINETAD, REE y elaboración APPA
Final energy 2016 - Spain

CONSUMO  Primary energy: 123.484 ktep (+0,2%)
Primary energy 2016 - Spain

PRODUCCIÓN  Electricity generation: 274.629 GWh (-2,27%)
Electricity generation 2016 - Spain

Texas Tech University – January 201839Fuente: Red Eléctrica de España
Spanish Electricity Mix - 2017

Texas Tech University – January 201840Fuente: Eurostat y MINETUR
Energy dependence of Spain stands at 72.8% (without counting the nuclear),
well above the European Union average (53.4%).
72,8%
53,4%
Energy dependence Spain vs EU

High dependence on imports has very negative effects
on our economy and our energy security.
Degree of self-supply

The renewable net export balance contributes in a highly positive way to leveling the trade
balance of our country, clearly deficit, and that in 2016 had an import balance of 18,753
million euros burdened by the high Spanish energy dependence.
Trade balance and Energy

Texas Tech University – January 201843Fuente: CNMC y REE
Installed Power Capacity in Spain

Texas Tech University – January 201844Fuente: CNMC, IDAE y REE
POWER
 Aggregate: 23.015 MW
 2015 Increase: 0 MW
GENERATION %
 Primary energy: 3,43%
 Electrical demand: 19,1%
Wind Power

POWER
GENERATION %
Hydro

POWER
GENERATION %
Solar PV

What happened in 2008?
Do you want a Coke?
Solar PV

POWER
GENERATION %
CSP

POWER
GENERATION %
POWER acumulada
Biomass, Biogas & Waste (electric uses)

Gross Domestic Product (GPD)
Fuente: APPA

Texas Tech University – January 201852Fuente: APPA
Gross Domestic Product (GPD)

Employment
Fuente: APPA

Balance of Trade
Fuente: APPA

Taxes vs Subsidies
Fuente: APPA

R&D / GPD
Fuente: APPA

Technology diversity
Biofuels
Hydro
CSP
Biomass Wind Power Geothermal Sea Energy
Small Wind
Solar
PV
Solar
Térmica

Fossil electricity replaced by renewables
Fuente: APPA

Energy replaced and economic savings
Fuente: APPA

Carbon emissions avoided and equivalent savings
Fuente: APPA

NOx & SO2 emissions avoided
Fuente: APPA

Energy imports savings by using renewables
Fuente: APPA

Specific retribution by technologies
Fuente: CNMC y elaboración propia

Pool savings (structure)
Marginalism system

Pool savings (M €)
Fuente: APPA

Pool savings (per kWh)
Fuente: APPA

Renewable generation and electricity pool price
Fuente: REE y OMIE

Aggregate tariff deficit
The tariff debt began to accumulate as of 2005. The current accumulated debt of the
electricity system amounts to 23,070 million euros, after having amortized 16,167 million
until December 31, 2016.
* Datos provisionales

Tariff deficit vs. Renewable retribution
In the 2005-2008 period, renewable energies received 5,824 million euros in premiums,
while the tariff deficit generated in the same period amounted to 15,099 million, 9.275
million higher than renewable premiums.
There is no correlation between tariff deficit and renewables’ specific retribution.
Tariff Deficit Specific Retribution
* Datos provisionales

2005-2015
Specific retribution vs Pool (and other) savings

Some system costs comparison (2013-2015)
Fuente: CNMC, REE, OMIE y elaboración propia

Yes, they are beneficial in economic terms for our society.
NON EASILY QUANTIFIABLE BENEFITS:
Greater energy independence (security of supply), improvement of quality
environmental impact, positive impacts on health, knowledge and experience, etc.
Macroeconomic Summary
Are Renewable Energies Profitable?
74.566
Jobs
generated
COSTS SAVINGS+WEALTH
5.360
7
SUBVENCIONES
FEED-IN
TARIFF
2795.370
5.989
EMISSIONSPOOL
SAVINGS
IMPORTS
234
1.007
2.793
R&D
INVESTMENT
TAXES
NET EXPORTS

2016 2020 2030 2050 2100
20%
20%
20%
40%
27%
27%
80 - 95%
2ºC
European directives have been key to the development of the
renewable sector in Spain and will be for the future
Weather EU Goals

Wind Power in Europe (2020-2030)

Texas Tech University – January 201876Fuente: CNMC y REE
1.678
2.076
3.212
4.658
2.820
1.652
2.270
2.884
914
66 31 43 150e
611e
7.578e
400e
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Eólica Solar Fotovoltaica Solar Termoeléctrica Minihidráulica Biomasa
Total Renewable Power Installed in Spain

Texas Tech University – January 201877Fuente: CNMC y REE hasta 2016 / Simulación de escenario APPA a 2020
1.678
2.076
3.212
4.658
2.820
1.652
2.270
2.884
914
66 31 43 150e
611e
7.578e
400e
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Eólica Solar Fotovoltaica Solar Termoeléctrica Minihidráulica Biomasa
Total Renewable Power Installed in Spain

 Last decade:
 Europe: clear goals | Spain: not energy policy but politic energy
 Spain: Stop-and-go policies
 Lack of long term planification: need of a stable calendar of tenders
 Renewable energies and macroeconomic contribution:
 Spanish energy dependence is well above the European Union (+20%).
 Renewable Generation saved 4,180 M€ in the OMIE daily market.
 RES are essential for the fulfillment of decarbonization objetctives.
 Some renewable technologies are already competitive in costs.
 Future:
 27%-35% renewable energy objectives in 2030
Conclusions

Sede Madrid
Dr. Castelo 10, 3ºC-D
28009 Madrid
Tel. 91 400 96 91
Fax. 91 409 75 05
comunicacion@appa.es
Sede Barcelona
Muntaner, 248. 1º1ª.
08021 Barcelona
Tel. 93 241 93 69
Fax. 93 241 93 67
appa@appa.es
Síguenos
Thank you very much for your attention
Javier Alberto Muñoz
www.appa.es
appa@appa.es

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