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SOLAR

Solar seeks its place under the Spanish sun

Sun-drenched Spain should be a natural for solar energy, and it is here that the technology is making an effort to stand on its feet financially without subsidies.

Solar seeks its place under the Spanish sun
View of solar panels facing a solar tower taken in Sanlucar La Mayor on April, 2011. File photo: AFP

Investors are now betting again on solar power generation in Spain, which for a decade was in the shadows as the country cut subsidies for the clean but expensive source of energy.

A plunge in the price of solar panels and lower construction costs has changed the maths, and new projects are moving forward again.   

Iberdrola, Spain's largest power company, this month launched a solar project with a capacity of 425 megawatts.   

And last week Spanish renewable energy firm Cox Energy signed a deal for the construction of 495 megawatts of capacity in Spain, and another 165 megawatts in neighbouring Portugal, in a €400 million ($490 million) investment.

Companies have sought authorisation for solar power projects across Spain with a total capacity of 24,000 megawatts, according to the director general of Spanish solar power lobby UNEF, Jose Donoso.

Subsidies stumble

That is the equivalent of 14 of the latest generation nuclear power plants that France hopes to launch later this year, after a decade of costly construction.

Spain was one of the pioneers of solar power-generation. Subsidies in the form of a high purchase price for solar power lured investors and homeowners to install solar panels, triggering an installation boom in 2008 that saw Spain's installed capacity jump five times to 3,355 megawatts.

But the global financial crisis, which ravaged Spain via a collapse of the property market, led to a bust in new projects and the cash-strapped government was quickly forced to abandon the subsidies.

Just 49 megawatts was added in 2015, and 55 megawatts in 2016, before picking up to 135 megawatts in 2017, according to UNEF figures.   

However in Germany, which kept up its subsidies, solar power swelled by six times although the country does not receive as much sun as Spain, meaning each panel produces less electricity.

The country now has more than 40,000 megawatts of solar power, compared with 5,400 in Spain at the end of 2015.   

But the sector has undergone “a complete reversal in less than six months”, according to Donoso.


Photo: AFP

Blazing return

One reason is that solar panels can now produce electricity at a lower price than traditional power sources such as coal, gas and nuclear.   

The cost of solar power production plunged 73 percent between 2010 and 2017, according the International Renewable Energy Agency (Irena), which predicts it will continue to fall.

Companies also realised the projects didn't need guaranteed prices from the state.

A tender for solar power projects launched by the government in July had so many bids that the price was capped at 30-31 euros per megawatt hour.    

According to the European statistical agency Eurostat, non-residential customers in Spain paid an average 107 euros per megawatt hour last year.   

Investors concluded that “it is better to run risks in the market then depend on regulated demand”, Donoso said.   

Moreover, investors into renewables know how much construction and operation will cost them, while traditional power stations have only a limited ability to lock in prices for fuel.

“It is much more profitable to invest in capital-intensive technologies (like photovoltaic power) than technologies where the raw material comes at a cost” like gas or coal, said the president of renewable energy lobby group Fundacion Renovables, Fernando Ferrando.

Room to grow

Donoso said this explains why major Spanish power firms such as Iberdrola “who stood aside from this sector” have suddenly jumped in.    

“The Spanish market will certainly be one of the biggest in Europe in the coming years,” he added.

A group set up by the government proposes setting as a goal having a total of 30,000-60,000 gigawatts of installed solar capacity by 2020, Donoso said.   

Spain's conservative government has so far not made solar power a priority, said Ferrando.

“We only use the sun for tourism not for electricity,” he said.   

Solar power represents just 3-4 percent of electrical power production in Spain, compared with 20 percent for wind power and 16-17 percent for hydroelectric power, according to the lobby group.

By AFP's Patrick Rahir 

ENERGY

How millions are being left out in the cold by Spain’s soaring energy prices

In her flat on the outskirts of Madrid, Pamela Ponce no longer turns on the heating despite the biting chill coming in through the windows.

How millions are being left out in the cold by Spain's soaring energy prices
Pamela Ponce at her home in Madrid. The 32-year-old says she hasn't been able to pay her electricity bills for the past three months. (Photo by OSCAR DEL POZO / AFP)

“The prices have gone up a lot, I have no choice,” sighs Ponce, a young Peruvian mother, her voice resigned.

On this bitterly cold January morning, the temperature outside is hovering around five degrees Celsius (41 degrees Fahrenheit). And inside, it’s barely much warmer.

“It can also be very cold inside, above all when there’s no sun,” she says, walking through the three rooms where she lives with her mother and two children in Leganes.

This 32-year-old says she hasn’t been able to pay her electricity bills for the past three months with prices in Spain soaring by a staggering 72 percent over the last year, one of the highest increases within the European Union.

The hike has been in part driven by Spain’s excessive dependence on gas to produce electricity and the lack of a major power provider like in many other countries to help keep prices in check through reduced tariffs.

“Before I was paying between €35 and €60 a month but now, it’s more than €100, without even mentioning gas which has also gone up,” explains Ponce, who hasn’t worked since catching Covid which left her with severe after-effects, notably affecting her left hand.

“I just don’t know what to do,” says the former cleaning lady who admits she’s reliant upon her ex-partner to pay the rent and buy food.

“I feel like I’m drowning,” she whispers, her voice choked with emotion.

According to Spanish government estimates, around 4.5 million people in Spain are affected by ‘energy poverty’, either because they’re incapable of paying the energy bills to cover their basic needs or because they have to put a large part of their earnings towards them. 

In an attempt to heat the flat, Pamela has bought a heater that runs off a gas bottle which she moves from room to room depending on what they need.

“It’s cheaper,” she says. But everything else is strictly rationed.

“My kids only take a shower every other day (and) I generally cook for 2 or 3 days at a time so I don’t have to turn the cooker on so much,” she explains.

SPAIN-ENERGY-SOCIAL-POVERTY

Electricity prices in Spain soared by a staggering 72 percent over the last year, one of the highest increases within the European Union. Photo: Oscar del Pozo/AFP

More and more families affected

And there are countless others like her.

“More and more families are struggling to pay their bills” and “have to chose between paying for food or light at the end of the month,” says Sara Casas, head of environmental issues at the Spanish Red Cross.

Last year, Spain’s left-wing government announced a series of tax cuts to try and bring down household bills but even this has not compensated for the huge rise in prices.

According to the UOC, Spain’s largest consumer organisation, the average annual home electricity bill in Spain has risen from 675 euros in 2020 to 949 euros in 2021, a rise of 41 percent.

The previous record jump, in 2018, was 18 percent.

Vulnerable people, such as “single mums with children, older people with a low income and migrants” are particularly badly hit because many “struggle to get benefits because there’s a lot of red tape and you have to bring in a lot of paperwork,” says Casas.

Layering up, homemade heaters

According to an awareness campaign being run by Medicos del Mundo, some 6.8 million of Spain’s 47 million residents are suffering to one degree or another from “energy poverty”.

Such a situation brings with it “a higher risk of suffering from chronic bronchitis, depression and anxiety,” the NGO says.

One of those struggling is Raul, a 55-year-old computer technician who lives with his wife, daughter and 82-year-old mother-in-law in the
northwestern city of A Coruña.

“Whenever we turn something on, we have to think about how much the bill will go up,” says Raul who hasn’t worked since suffering a stroke in March 2021, with the family living off his wife’s salary.

“My neurologist told me I should avoid stress but it’s very difficult when you don’t know if you’re going to be able to pay next month’s bills,” he says, admitting they have barely switched on the heating this winter, despite the cold and the humidity.

“We bought a heated blanket for my mother-in-law” and “inside the house, I always wear lots of jumpers or coats,” he says.

He has also been trying to cobble together a home-made heater.

“It’s a temporary solution,” shrugs Raul, who says he is keeping his fingers crossed “that the prices will eventually come down”.

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