AleaSoft, June 25, 2020. On June 23, Royal Decree‑Law 23/2020 was approved, which includes measures for the reactivation of the economy as a result of the coronacrisis, which is great news for the Spanish renewable energy sector as it represents an impulse to continue growing. This was one of the highlighted topics of the discussion table of the Spanish version of the webinar of AleaSoft, in which the financing of the renewable energy projects and the evolution of the energy markets during the crisis of the COVID‑19 was addressed.
Royal Decree‑Law 23/2020
On June 23, the Spanish Government approved the Royal Decree‑Law 23/2020 in the Council of Ministers, which approves measures in the field of the energy for the economic reactivation after the coronavirus crisis, which represent a boost to the renewable energies.
One of the included topics is the new design of the renewable energy auctions, in which the remuneration price of the energy of the new renewable energy facilities will be determined. At auctions, it will be possible to distinguish among the different generation technologies taking into account their technical characteristics, manageability levels, location, technological maturity and other criteria that guarantee the ecological transition. The first auction is expected to take place in the second half of this year. Before that, a Royal Decree must be approved, specifying the details of this auction.
The RDL also regulates the figure of the electricity storage, which will make it possible to take advantage of the important solar and wind resources available in Spain and avoid the loss of manageability of the system that involves the massive implementation of non‑manageable renewable energy generation and the closure of thermal power plants. At AleaSoft the explicit mention of the hydrogen is missing, which is considered essential in the decarbonisation of the industry and the electricity sector.
Other notable topics included in the RDL are the establishment of a framework that facilitates the processing of the access and connection to the electricity grid permits, prioritising the projects that have a firm will of execution, the introduction of the hybridisation of renewable energy technologies, of the independent aggregators and of the renewable energy communities, the simplified authorisation of R&D&i projects and the regulatory test banks.
This RDL will serve as a boost to the renewable energy sector to face the uncertainty that is currently experienced in the energy markets due to the pessimistic prospects for the future of the economy that the COVID‑19 pandemic is leaving us. These measures will allow the sector to continue to grow to achieve the objectives of the Integrated National Energy and Climate Plan (NECP) that set a scenario of 39 GW of solar photovoltaic capacity and 50 GW of wind capacity by 2030.
The interest that this RDL aroused was evident in the webinar “Influence of coronavirus on electricity demand and the European electricity markets (III)” organised at AleaSoft and which took place on June 25 with great success of participation, being one of the topics that stood out at the discussion table of the Spanish version of the webinar.
Webinar “Influence of coronavirus on electricity demand and the European electricity markets (III)”
The panellists of the webinar agreed that the new RDL is very good news for the renewable energy sector in Spain. During the analysis table of the Spanish version of the webinar it was commented that it regulates the access and the connection to the grid very well, although, in the opinion of some panellists, it was somewhat short and shy in the face of the auctions. The opinion was general in the sense that new business and new income opportunities are opened with new markets or with aspects such as the greater ease for the repowering of parks, the storage or the hybridisation of technologies.
Evolution of the energy markets
During the webinar, the evolution of the energy markets during these last weeks, characterised by the de‑escalation of the measures against the pandemic of COVID‑19 in most European countries, was analysed. The price of a barrel of Brent oil was on a clear upward trend for several weeks and the prices are approaching pre‑crisis levels. For its part, the TTF gas price stopped its downward trend that was registered since the end of 2018 and that had such an impact on the prices of the electricity markets. In the last two weeks, the prices indicate that we are probably facing a solid recovery in gas prices.
The electricity markets across Europe are clearly on a recovery path thanks to rising gas and CO2 emission rights prices, and helped by the seasonal behaviour of the electricity demand and the renewable wind and hydroelectric energy production. As one of the panellists commented, it seems that the market already found its equilibrium after the tremendous impact of COVID‑19, and now it is beginning to recover.
This upward trend seems relatively stable for the summer, although with values far from those of previous years. The greatest uncertainty right now was transferred to the arrival of winter, which, with the drop in temperatures and the opening of schools and universities, may lead to the appearance of new outbreaks of the epidemic that, if they were important enough, could have important consequences for the economic recovery and, consequently, for the energy demand and the markets.
The financing of renewable energy projects continues active
According to the participants in the analysis table of the Spanish version of the webinar, the financing market continues to be very active even with low market prices like the current ones, because the view of the sponsors and financial institutions is set in the long term. In fact, the investments in renewable energies look safer and with lower impact from the current crisis than other sectors. Although the development and the construction of new projects may be somewhat delayed and the financing is a little more conservative in terms of guarantees and costs, the investor appetite continues present.
In the conclusion round of the table of the Spanish version of the webinar, all the participants agreed to send a message of optimism for the future of the renewable energy projects.
The next webinar of AleaSoft will take place after the summer, on September 17, where we will have a slightly clearer vision of the path that the recovery from the economic crisis is taking and of the possibility of new outbreaks of COVID‑19.
Source: AleaSoft Energy Forecasting.