A Gift from the Gods

Spain is famously the sunniest country in Europe, which is a big selling point for its tourism industry. However, this vast amount of sunshine makes Spain an ideal candidate for an emerging industry, too: solar power.

Spain deploys both photovoltaic panels (PV) as well as many—less technologically advanced—concentrated solar-thermal installations, which together produce over 7GW. With the dropping prices and increasing efficiency of solar panels, the southern European nation is swiftly shifting to PV panels.

In 2018, PV plants fed over 4.7GW to the Spanish electrical grid, while concentrated solar-thermal installations contributed around 2.3GW. 2018 was indeed an important turning point in the history of solar energy in Spain. The country had stagnated in the expansion of its solar power infrastructure between 2012 and 2018 due to economic setbacks and overregulation such as the notorious “sun tax” policy, but many regulatory obstacles were revoked in 2018 to be replaced with incentives such as reasonable feed-in tariffs to the national grid.

Spain has an advantage over its competitors in solar energy: sunshine is an accessible resource across Spain, especially in its southern three quarters. Unlike some countries which have a potential to launch solar plants only in uninhabited deserts of the country, Spanish citizens can mount residential photovoltaic panels atop their homes, which are often called self-consumption units in the industry.

It is estimated that Spain’s nominal residential photovoltaic capacity is around 13GW—a free energy resource that Spain can tap into only with a modest amount of investment by each household. Although Spain’s current use of this limitless resource is far from perfect, today solar panels can be spotted on top of parking lots, on the south-facing facades of buildings, and on the roof of many public places.

This is not to say that Spain is not constructing industrial, large-scale solar plants. In early 2020, Iberdrola, the nation’s electric utility company, completed what was then Europe’s largest solar facility in Extremadura, western Spain, employing some 1.4 million high-tech solar panels. The Núñez de Balboa plant is so huge in scale that, with a nominal capacity of 500MW, it can continually meet the needs of 250,000 people for electrical power. It is estimated that the plant will prevent the release of over 200,000 tons of carbon dioxide into the atmosphere.

The plans for solar energy don’t stop there. The Francisco Pizarro project (590MW), which will become operational by 2022, is slightly larger than the Núñez de Balboa plant. If all goes according to plan, however, before 2030, Iberdrola will have commissioned yet another hybrid solar and wind farm with an output twice that of the Núñez de Balboa plant.
Spain’s state-controlled electric utility company is not the only force behind the renewable energy movement in the country. TBY recently talked to Juan José Sánchez, CEO of Capital Energy, who pointed out that his company’s mission is to “make a decisive contribution to an ecological and just transition of both our economy and society through the energy sector transition under way.”

With many such private stakeholders active in renewable energies across Spain, we will see a greater shift toward renewables in the Iberian Peninsula, as many companies such as Capital Energy tend to venture into the Portuguese market as well. However, the most important message behind the activities of private companies in the renewables sector in Spain is that solar and wind energy have reached a level of maturity that they make perfect economic sense. If solar energy was still a novelty technology, private companies would have no incentive to get involved in the sector.

As for self-consumption units, which were mentioned earlier, the private sector clearly has the upper hand in almost all areas. EDF Solar specializes in the manufacturing of self-consumption photovoltaic installations and enjoys a market share of 60%. Fernando Romero Martinez, the company’s CEO, told TBY the company’s combined self-consumption installations generate more than 420MW—a figure not much smaller than the output of Europe’s largest single solar plant. EDF Solar has set itself the rather ambitious “goal of reaching 39GW before 2030,” adding confidently that the goal “will be met even before 2030.”

Xabier Blanco, President of solar energy company STI Norland, told TBY in a recent interview that “in 2019, we achieved the goal we had set for ourselves, which was to reach EUR100 million in revenue. In 2020, we exceeded our goal of growing by 25%, experiencing 200% growth compared to 2019 even during the pandemic.”

The fact that many private solar energy companies are doing well in the Spanish clean energy market demonstrates that the country has reached a degree of maturity in energy policies to steadily shift to solar energy in a profitable manner and without government subsidies. This is also thanks to having an ideal climate in terms of sunshine and having access to local and international state-of-the-art know-how.