AleaSoft Energy Forecasting, June 30, 2023. The objectives of photovoltaic and wind energy capacity, self‑consumption, green hydrogen and biogas of the NECP 2023‑2030 are very ambitious and are aligned with the expectations of the sector and with the potentiality of solar and wind resources of Spain. It is undoubtedly good news. However, it will be necessary to define a roadmap that allows these objectives to be met, removing barriers, encouraging investment and boosting green demand to properly integrate the new renewable energy capacity into the system.

On June 28, the draft of the National Energy and Climate Plan (NECP) 2023‑2030 was published. This draft updates the objectives established in the previous version upwards, taking into account more ambitious objectives of the European Union for commitment to renewable energy after Russia’s invasion of Ukraine. The final version of the document is expected to be finalised in June 2024.

Main objectives of the draft of the NECP 2023‑2030

Undoubtedly, the objectives of the draft of the new NECP are ambitious. Regarding electricity generation, it was established that the total installed capacity will reach 214 GW in 2030, of which 160 GW will be from renewable energies. The scenario for wind energy amounts to 62 GW and that of solar photovoltaic energy to 76 GW, values that are in line with the requests made by the Asociación Empresarial Eólica (AEE) and the Unión Española Fotovoltaica (UNEF), respectively. As for self‑consumption, it is expected to reach 19 GW at the end of this decade. The energy storage target, including batteries, pumping and solar thermoelectric energy, stands at 22 GW by 2030. The installed capacity targets for the rest of technologies for electricity generation in 2030 remain similar to those of the NECP 2021‑2030.

AleaSoft - Spanish NECP installed power scenario 2030Source: Prepared by AleaSoft Energy Forecasting using data from NECP.
* Non peninsular territories
** Including solar thermoelectric energy storage reaches 22 GW according to the NECP 2023 2030

It should be noted that in the draft of the NECP 2023‑2030 green hydrogen gains prominence and it is expected that the installed capacity of electrolysers in 2030 will be 11 GW. In addition, a measure related to the Iberian Hydrogen Corridor (H2MED) is included. The biogas production target is also doubled, reaching 20 TWh in 2030, a boost that was demanded by the Asociación Española del Gas (Sedigas).

As for international electricity interconnections, there is no change regarding the NECP 2021‑2030. It is expected that the exchange capacity with Portugal will increase to 3 GW. In the case of the exchange capacity with France, it should reach 8 GW including the new interconnections between Aquitaine and the Basque Country (Biscay Gulf Project), the interconnection between Aragon and the Atlantic Pyrenees and the interconnection between Navarra and Landes.

And what about the electricity demand? This is a worrying aspect of the draft of the new NECP because demand is expected to be 238 TWh in 2030, which represents a decrease of 11 TWh compared to the NECP 2021‑2030 scenario. This decrease may be caused by the drop in demand in recent years and due to the increase in the self‑consumption scenario. The fact that the demand target does not increase is worrying because it will be difficult to integrate all the production with renewable energies that is expected, which can lead to a high volume of curtailments, which in the NECP 2023‑2030 is estimated to be 25 TWh in 2030, and the “duck curve” to occur on a sustained basis, which may discourage the deployment of the new renewable energy capacity that is aimed and needed.

AleaSoft - Spanish NECP electricity demand scenario for 2030Source: Prepared by AleaSoft Energy Forecasting using data from NECP.
In the case of electric vehicles, one of the vectors that would increase the electricity demand, 5.5 million vehicles are expected in 2030, which represents an increase of 10% compared to the NECP 2021‑2030 target. The electrification of the economy is also expected to increase until reaching 34% in the year 2030.

The draft of the NECP 2023‑2030 also takes into account measures aimed at increasing demand flexibility, promoting demand management, energy communities and the proactive role of citizens in decarbonisation. In addition, the Plan deals with the need to adapt the transmission and distribution lines in the national territory to carry out the integration of the renewable energy generation.

Other notable objectives are the increase in the ambition to reduce greenhouse gas emissions to 32% compared to 1990 and the reduction of the energy dependence, going from 61% that was pursued with the NECP 2021‑2030 to 51% in the current draft.

In order to achieve all objectives of the new version of the NECP, total investments are expected to amount to 294 billion Euros between 2021 and 2030, which represents an increase of 53 billion Euros compared to the estimate made to achieve the objectives of the version of the NECP 2021‑2030.

An ambitious NECP is not enough, ambition is necessary in its implementation

Among the strengths of the draft of the NECP 2023‑2030 is the promotion of solar photovoltaic and wind energy and self‑consumption, taking advantage of the treasure that Spain has, being the country with the largest solar resource in Europe and being among the countries with the largest wind resource. It is also essential the increase in the objectives of energy storage and green hydrogen to take advantage of renewable energy generation and reduce curtailments.

However, there is a lack of ambition in the renewable energy demand and in international interconnections, two elements that should be promoted for the integration of renewable energy generation to be fruitful. It is very important to accelerate and encourage the electrification of the economy to absorb all the new renewable capacity that is intended to be installed. For example, new measures should be implemented to accelerate the deployment of electric vehicles, which are currently very far from the objective pursued in 2030. In addition, for demand to adjust to the hours of larger renewable energy production, signals should be given through the electricity tariff so that consumers move their consumption towards those hours and thus avoid the duck curve. This is something that might be done now.

In addition, for the objectives of new renewable energy generation, storage, green hydrogen defined in the new Plan to materialise, it is important to streamline and make administrative procedures more flexible so that they do not impede the development. It is necessary to encourage the arrival of storage as soon as possible, so the creation of the capacity market is important. In addition, the development of electricity infrastructures should be accelerated to adapt them to all the new renewable energy capacity and gradually create the infrastructures to produce, store and transport green hydrogen and biogas, as well as to recharge electric vehicles. Stable regulation that sends signals to encourage investment will also be necessary. This NECP draft undoubtedly sends clear signals that Spain intends to commit to renewable energies to achieve energy independence from abroad and decarbonise the economy. An ambitious roadmap is now necessary to meet those goals.

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Source: AleaSoft Energy Forecasting.