Wind and solar in Spain – Overview 2023

For the sixth year, we publish a summary of how wind and solar have performed in Spain in the year that has just ended. A year marked by the return to normality of electricity prices and by the confirmation of solar as the great giant of the future of renewable generation.

 

The data for this report are publicly available on Red Electrica‘s excellent website. Some of these data are still provisional so they may vary somewhat when they are final, but they will be small changes that will not affect the overall picture.

 

1. Generation mix

 

 

 

As Red Eléctrica itself announced in December, the big news is that for the first time in history, renewables exceeded 50% of annual generation in 2023. Specifically, they will contribute 50.4%, with wind leading the mix with 23.5% ahead of nuclear. Solar PV continues its unstoppable growth and already contributes 14% of annual generation (10.1% in 2022).

 

2. Demand

 

 

We continue in 2023 with the trend of the last few years of reduced demand. A few months ago we analysed this in another post on electrification, as it is worrying that this aspect is not progressing at the same pace as the decarbonisation of generation. Self-consumption and efficiency are undoubtedly some of the causes, but the reduction in industrial activity in the electricity-intensive sector, as mentioned in the Windletter, has probably also had an impact.

 

3. Daily production

 

 

• As usual when looking at this type of graph with daily resolution, it is impressive to see the great variability of wind power production, with peaks and valleys that follow each other in the space of hours. With the battery systems currently available with storage capacity of 4h at Lion and more than 8h at flow, the year is getting closer and closer when these sawtooths will disappear and will not be a grid integration problem.

 

 

• On 20 October, wind and solar PV covered 62% of the day’s demand, 7 points above the 2022 peak.
• On the same day (20-Oct), wind power generation reached its daily maximum with 416 GWh of production.
• Solar PV, on the other hand, peaked on 2 August with 163 GWh, which is 6.5% more than the peak in 2022. It is unusual for the peak to be reached in the middle of summer with such high temperatures that reduce the efficiency of the panels.
• On 27 February the maximum combined wind + solar PV generation was reached with 501 GWh.
• Meanwhile, all renewables (including hydro and others) reached 73.5% of demand on 3 November, exceeding the 2022 maximum by 10 points.

 

 

4. Monthly production evolution

 

 

• By plotting the production data by month, the curves are much smoother and the high seasonal complementarity of wind and solar is much better appreciated.
• By superimposing the curves of previous years, the spectacular growth of solar PV can be seen. For the first time, solar production in the summer months exceeds that of wind power.

 

5. Evolution of annual generation

 

 

• Solar PV was once again the main protagonist in 2023, with a spectacular 34% growth in annual production, which exceeds the 33% in 2022. With this growth, it is already approaching CCGT generation levels, something unthinkable just a few years ago.
• Wind power is once again showing signs of stagnation, with only 2% growth in production, which is clearly insufficient if we are to meet the PNIEC targets.

 

6. Installed capacity

 

 

 

• In terms of installed capacity, solar has added 4.7 GW to its installed base, which is a new record. Despite the impressive figures, we are far from the 7.4 GW that should be installed annually to comply with the PNIEC.
• Wind power, for its part, has remained at a meagre 573 MWs installed, a far cry from the 4.5 GW it would need to install to meet the 2030 target set in the PNIEC.
• It seems clear that after the update of the PNIEC, the objectives set are still a long way off and the sector sees them as unrealistic, especially in wind energy. Perhaps it is time to look less at the PNIEC target and concentrate on removing barriers that are preventing the deployment of specific projects.

 

 

• With the strong growth of solar PV, it has almost caught up with combined cycle in installed MWs and will soon become the second largest generation source by installed capacity.

 

7. Capacity factor

 

 

• In terms of capacity factor, solar PV has also improved compared to 2022 while wind has fallen a little, which is why annual production has grown so timidly.
• It should be remembered that the main element affecting the capacity factor is the resource (wind and irradiance) available each year, but there are also other factors such as the efficiency of the technology, maintenance or curtailments. In general, with equal resource we should see better capacity factors as both solar and wind technology and O&M are becoming more efficient.
• This year we have heard a lot about curtailments affecting wind and solar although the capacity factor values do not seem to have been affected very much.

 

8. Market prices

 

 

• In 2023 we have seen wholesale electricity prices return to “almost normal” values after the madness of 2022. Although prices are still high, they seem to be moderating.
• In any case, the exposure of renewable projects to the pool price is likely to be reduced in 2024 thanks to the PPAs and the probable reactivation of auctions with new criteria and prices.

 

 

9. Conclusions

 

12 months ago we highlighted 4 aspects that needed to be improved in 2023, so let’s see how they have evolved:

• The “delaying” discourse is still very active, although the good news is that the team leading MITECO has been very firm on these positions and policies are strongly supportive of renewables at all scales.

 

• Redesign of auctions: progress, although much slower than desired. There are already plans from the EU to incorporate non-price criteria and hopefully the NZIA will also include other pre-qualification criteria. In addition, the reform of the electricity market was approved, which incorporates CFDs.

 

• Permitting: this is undoubtedly where most progress has been made. The milestones set by RDL23/2020 and RDL29/2021 have stressed the sector but have undoubtedly managed to unblock the procedures. Now RDL 8/2023 will try to bring the milestones more in line with market reality. NTeaser reflected this very well in his linkedin post.

 

• Offshore in Spain: again, progress is very slow. We already have POEMs but the rest of the regulation has not yet arrived. Evidently the 2030 target is already a chimera but it would be good to accelerate the process to create a pipeline of viable projects.

 

 

And what will be the priority in 2024? Well, there is work to be done on many fronts, but we will undoubtedly keep a close eye on the evolution of European wind OEMs, whose survival is at stake, and EU initiatives such as the WPAP will be key to this. We will also have to keep a close eye on the pace of installations to see if the unblocking of procedures is transferred to deployment. And finally, storage and offshore should get off the ground this year once and for all. In short, if 2023 has been an intense year for renewables, I believe that 2024 will not be far behind.