Covid-19 Insight Report: Spain

Resurging sector proves resilient in hard hit Spain

Operations and maintenance work saw a drastic drop during Spain's lockdown (pic: AEE)

Although Spain has been notoriously hard-hit by the corona virus, its wind market has kept its head well above water, with 735MW of new capacity connected in January to September 2020, according to national wind association AEE.

"Around 1GW could be in sight for year-end 2020," according to AEE chief executive  Juan Virgilio Márquez, taking cumulative capacity to 26.8GW. Still, Virgilio recognises "some slowdown from administrative lockdown backlogs".

Indeed, Siemens Gamesa (SGRE) confirmed "purely temporary" workforce cuts in September at its Ágreda nacelle plant "due to some project delays".

Still, following the 2.3GW installed last year, 2020 could mark the second consecutive year of gigawatt-scale build since the conservative People’s Party government clamped a moratorium on wind in 2013.

Some release from the ensuing project pipeline pressure came with three power auctions in 2016-18, allocating 4.6GW to wind.  Of that, 1.6GW remains to be completed.  

The current socialist government, in office since June 2018, has reiterated renewables as essential to the post-lockdown economic recovery. In June, a government decree ordered state agencies to draw up further power auctions to reach 50.3GW of wind capacity by 2030, as set in February’s National Energy and Climate Plan (NECP).


As an economic barometer, figures from grid operator Red Electrica de España (REE) already indicate a recovery. For the full month of August, electricity consumption was only 2.6% down against the same period in 2019.  

Spain’s lockdown, from mid-March 15 to 21 June, was among the strictest anywhere in Europe. Particularly hard-hitting was the closing of all but essential factories from 30 March to April 9, with workers furloughed.

Operators were less affected. "Sector uncertainty soon dissipated," says Virgilio Márquez. As an essential service, power generators, including wind, operated throughout the lockdown. In fact, Spain produced more wind power than any other European country seven days running, 11-17 July, according to the European transmission network ENTSOE, covering 33% of daily demand on 11 July.


That is not to say that profits didn’t suffer, though. As power demand dropped, prioritised renewables displaced expensive gas and coal, lowering the wholesale market price for all; an effect dubbed as renewables cannibalism.

"Prices in the first half of 2020 were exceptionally low at €29/MWh, against €51.7/MWh in H1 2019," an Acciona spokesperson points out. Acciona’s average price fell 21% to €60/MWh, from €76/MWh last year. The company expects full-year 2020 prices to be around €33/MWh: an improvement, albeit 30% below 2019.

Operations and maintenance (O&M) work also saw a drastic drop. "Only emergency repair work went ahead during lockdown," says Alberto Ceña, secretary general of renewables O&M association AEMER. Even then, vehicles were restricted to one occupant. accommodation was closed.

AEMER members mainly feared litigation for failing to perform scheduled preventive maintenance, says Ceña: "But operator-clients are now negotiating exceptional terms, with no sign of court cases yet."

Turbine production

Despite temporary factory closures, "turbine output remains high, both for export and home markets," says Virgilio Márquez. "Global majors like SGRE and Vestas — with a combined 72% of Spain’s turbine market — already had extensive virus protocol experience from their operations in China and Italy."

SGRE, for instance, confirms 2,000 post-summer-holiday Covid tests across its 5,000 strong workforce, of which 1% tested positive.  

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