New hope in Spain illustrates trend

Good news from Spain has been in short supply for several years, but the market is now showing signs of life.

By May 2020, 4.6GW of new installed wind power capacity is scheduled to be installed and connected, taking the country's total to around 28GW and cementing its position as Europe's second-largest wind-energy generator.

Spain’s fragile economy and fractious politics may yet blow this off course, and it is notable that the country’s two leading wind developers and operators, Iberdrola and Acciona Energy, look unlikely to take part in this new build.

But there are grounds for optimism in the involvement of established developers, such as Enel Green Power; a 36% rise in renewables investment in Spain in 2017 over the previous year, according to Bloomberg New Energy Finance (BNEF); and wholesale electricity prices at a level that ensures wind’s competitiveness.

The big winner in Spain’s third round of auctions for renewables, though, was solar PV, which won 3.9GW of the allocated 5GW against wind’s 1.1GW. That goes with the trend of solar’s growth and its reduction in costs outstripping wind’s at an increasing rate.

BNEF’s 2017 clean-energy investment report quotes solar PV as attracting nearly half of the $333.5 billion total for 2017. The $161 billion invested was 18% up on the previous year, despite an estimated fall in costs of 25%. In contrast, wind took in less than one third of the total last year, and its $107 billion represented a 12% fall from 2016.

Growing competition

Our annual comparison and analysis of generation costs provides further evidence of the trend. Solar PV is predicted by one source to add an annual average of 70GW of new capacity between now and 2040. The forecast for wind is 50GW.

Wind’s superior electricity productivity continues to give it the competitive edge over solar in good locations, but the gap between the two is narrowing quickly.

Just as wind energy is reaching the point of cost parity with fossil fuels — indeed, undercutting them in a number of places — it encounters increasingly fierce competition from another renewables source.

Together though, they are driving fossil fuels and nuclear off the electricity-generating map. Coal, even assuming carbon capture and storage at just 30%, cannot compete. Neither can new-build nuclear.

Gas is the last one standing.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in