Spanish government boosts solar for self-consumption

The government in Spain, one of Europe’s largest solar energy markets, is among those leading the charge to provide various investment schemes to accelerate the rollout of renewable energy capacity.

Among the incentives, Spain has approved €450 million in grants to spur investment in green new deals and battery systems. The financing is part of its recovery and resilience plan approved by the European Commission to stimulate economic recovery from the COVID-19 pandemic.

In June, the European Commission endorsed Spain’s plan, a step towards distributing €69.5 billion in grants under Europe’s Recovery and Resilience Facility (RRF) between 2021 and 2026. The RRF will provide up to €672.5 billion to support investments across the European Union.

The Spanish budget allocates 40% of its financing to measures that support climate objectives, such as the deployment of technologies for renewable energy and green hydrogen, along with sustainable mobility, building energy efficiency, and industry decarbonization.

Spain plans to invest €6.1 billion in clean technologies and advancing the use of renewables. EU member states are required to assign 37% of their budget to the green transition to be eligible for the RRF funds.

Spain makes top 3 green investors in Europe

Spain’s initial €450 million package can be expanded up to €900 million, with €400 million for the residential sector, €300 million for industry and agriculture and €200 million for services. The Spanish solar industry association, UNEF, estimates that the funding will finance 1.43GW of new generation capacity in the industrial and agricultural sector, 784MW services and 860MW in the residential sector, for a total of 3.07GW.

Spain’s Ministry for the Ecological Transition and the Demographic Challenge (MITECO) has also announced an investment of €110 million in battery storage, which can be expanded to €220 million, to finance batteries for new and existing solar photovoltaic self-consumption systems.

Spain so far has the third largest amount of green investment and economic recovery projects in the European Union. There are 79 projects worth a total of €24.5 billion, which include 30 energy projects – behind only France with 47 energy projects.

Key Spain renewable energy projects

The Ernst and Young report identified projects across Europe that are at an advanced stage of development and could be eligible for financing. In Spain, these include a €305 million, 590MW Francisco Pizarro solar farm project in Extremadura led by utility Iberdrola, which is expected to be commissioned in 2021.

Renewable developer Enel Green Power has a €1.4 billion Teruel project to convert a coal plant to a renewable installation with 1.585MW of solar power, 140MW of wind power and 160MW of battery storage.

Earlier this month, MITECO announced it has selected 79 renewable projects in the industrial sector to receive more than €76 million in funding. The projects are in factories and facilities in Andalusia, Asturias, Cantabria, Castilla-La Mancha, Extremadura and La Rioja, and will add a total power generation capacity of 418MW.

Spanish solar sector to receive auction boost

On 17 August, MITECO announced its second renewable energy auction for the 2020-2025 period, to be held in October. The auction invites bids for 3.3GW of capacity for Spain renewable energy, including 700MW for solar photovoltaic (PV) projects, 300MW for distributed solar systems, and a technology-neutral 200MW, as well as 1.5GW of wind capacity.

The 300MW of capacity for distributed solar is aimed at installations of no more than 5GW, with a local community focus. It is providing specific support for these projects because they offer greater efficiency, reduce energy losses, and need less network infrastructure. Spain’s transmission network has come under pressure after it added 4GW of renewables last year, including 2.8GW of ground-mounted solar and 596GW of distributed solar.

In addition, MITECO will allocate 600MW to wind or solar projects that will be operational within eight months, by the summer of 2022.

The first auction was held in January and awarded 3.03GW of wind and PV capacity at a price of €25 per MWh, which was lower than the wholesale market price. MITECO said it aims to speed up the deployment of renewables to reduce consumer bills and advance its achievement of climate objectives.

Spain overtook Italy to regain the top spot as the largest renewable energy market in Europe during the second quarter

Spain accounted for more than a third of the project offers on the European marketplace. Its solar PPA prices fell by 10.3% during the quarter to €30.50, the lowest in Europe.

Later this year, MITECO plans to launch competitive bidding processes for at least 200MW of thermoelectric solar capacity, along with 140MW of biomass and 20MW of other technologies.

Optimize your solar investment

Spain is showing how countries can invest in the energy transition, limiting carbon emissions, reducing electricity costs, and stimulating economic activity. The country is prioritizing fast-track solar energy projects and those with a community focus, to democratize and accelerate its energy transition.

That puts Spain at the forefront of Europe’s efforts to tackle climate change while stimulating economic recovery from the effects of the COVID-19 pandemic.