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All the renewable energy will fit because the limit of the demand is not the Spanish electricity system

AleaSoft, October 6, 2020. A change of approach is necessary to place the role of the renewable energies in the energy transition in the whole of all primary energy consumption in Europe and not limit it to the Spanish electricity system. Regarding one of the key aspects in the energy transition, the role of the green hydrogen, at AleaSoft the objectives set out in the Hydrogen Roadmap for 2030 are considered insufficient.

In the interview of El Periódico de la Energía, Antonio Delgado Rigal, founder and CEO of AleaSoft, comments on a very interesting aspect that is not normally taken into account when thinking about an electricity system with 100%, or with a high percentage, of renewable energy production.

An argument that is usually thrown to question the ability of the electricity market to work properly with a lot of renewable energy production is that so much renewable energy does not fit due to the demand that exists. Certainly, looking at the current electricity demand levels and doing a few simple multiplications, it can be quickly concluded that, in a few years, the renewable energy production will exceed the demand at some times of the day, mostly in the hours of maximum solar irradiation due to the photovoltaic energy production. If the supply exceeds all possible demand, the market is no longer efficient and encounters problems such as zero prices and discharges.

The most basic objection to this postulate is, obviously, that the electricity demand is going to increase due to the electrification of sectors such as the transport and the industry, which need to be decarbonised. The energy storage and the demand flexibilisation are also aspects to take into account. But going back to the multiplications, this expected increase in demand and storage capacity could delay the problems for a few years, but they would end up arriving anyway.

At this point, what is discussed in the interview is a paradigm shift. It is necessary to stop understanding the renewable energies only within the Spanish electricity system. First it is necessary to understand the renewable energies as the primary energy source of the future. That is to say, the renewable energies will not only be the most important form of electricity production, but, in a 100% renewable future, they will be the energies that will move everything.

And, secondly, we must not limit ourselves to the Spanish energy system, we must place ourselves in a European energy system, within which the Spanish system will exchange energy in a highly efficient and 100% renewable single continental system.

AleaSoft - Energy system Spain Europe electricity green hydrogenSource: AleaSoft.

The role of green hydrogen

A key factor on this path to a 100% renewable energy system will be the green hydrogen. The production of hydrogen from renewable energies will allow, on the one hand, decarbonising sectors such as the heavy transport or the industry that requires heat, sectors where the electrification can be very inefficient, and, on the other hand, it will allow storing large amounts of energy for long periods of time.

At AleaSoft it is considered that the objectives of the Hydrogen Roadmap recently approved by the Government are insufficient. By 2030, a fleet of 5000 light vehicles powered by a fuel cell is considered a very low figure to advance at an adequate pace towards the decarbonisation targets of 2030 and 2050.

The electricity market prices curves and the financing of renewable energy

Within the framework of the AleaSoft‘s informative work on the energy markets, this Thursday, October 8, it will participate in the webinar “Electricity market prices curves for renewable energy financing”, organised by APPA Renovables. Additionally, on October 29, the second part of the webinar “Energy markets in the recovery from the economic crisis” will be held, which will also include the participation of two invited speakers from the consulting firm Deloitte, Pablo Castillo Lekuona, Senior Manager of Global IFRS & Offerings Services and Carlos Milans del Bosch, Partner of Financial Advisory, and where the topics analysed in the first part of the webinar will continue to be deepened.

Source: AleaSoft Energy Forecasting.

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