The Energy Transition and International Conferences

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The Energy Transition and International Conferences

The Conference of the Parties (COP’s), the Davos Forum, the General Assemblies of the United Nations…little by little the objectives of the international summits begin to have a direct interconnection with the Sustainable Development and the publication of measures at the national level. On Tuesday, the 21st, the date of the Davos Forum, the Council of Ministers approved the declaration on the environmental climate emergency, in which the government commits itself to adopt 30 priority lines of action.

What is the Davos Forum?

The World Economic Forum holds four meetings per year. The first and most important is the Annual Meeting of the World Economic Forum, colloquially known as the Davos Forum because it is held in Davos-Klosters, Switzerland. Here, at the beginning of each year, public and private organizations meet to cooperate on various critical global programs.

The Word Economic Forum promulgates the concrete model of “stakeholder capitalism”, in which business leaders go beyond and respond to the call of society. They have the potential to realize broader societal goals, such as the Paris Agreement and the United Nations Sustainable Development Goals.

The United Nations Development Goals

The 2020 conference has as its theme: “Stakeholders for a cohesive and sustainable world” and its priority is to “help governments and international institutions to monitor progress towards the Paris Agreement and the Sustainable Development Goals and facilitate discussions on technology and trade governance”.

The following 17 points are the development goals of the United Nations, the importance of which lies in the interrelationship between them and the action plans planned by individual countries.

Within these objectives those directly related to energy are 7 and 13. That is why, not coincidentally, the government, last January 20, made one of the main objectives of the PNIEC more ambitious.

What is its relationship to energy?

For some time now, all world summits have been chaired directly or indirectly by one theme: “climate change”. This problem is increasingly being automatically translated into “energy transition” policy measures. And said and done, last Tuesday 21st, the date of departure from the Davos forum, the council of ministers approved the government’s declaration on the environmental climate emergency, where the government commits to adopt 30 priority lines of action to be carried out in the next 100 days.  The first step is not new, it was already underway, was a review of the PNIEC 2020-2030, which consists of establishing more ambitious targets than those of the EU. This draft was submitted for consultation between February and April last year and was updated on 20 January.

Within the PNIEC, the central objectives are 7, which is non-polluting energy, and 13, which is the climate action plan.

The revision of the National Energy and Climate Plan

The revision of the National Energy and Climate Plan makes the objectives more ambitious, fundamentally the modifications move around the variation of one of the main objectives: It increases the reduction of greenhouse gases by 2 p.p. with respect to 1990 by 2030.

To reach 23% GHG reduction by 2030, increase the final use of energy from renewable technologies.

The closure of coal-fired plants is the second of the 30 measures, but this measure was already included in the previous plan, which already took into account the phased closure of coal-fired plants and the progressive closure of nuclear plants (four of the seven reactors will be withdrawn). The variation in the evolution of installed power is not too great with respect to the previous draft, but it does take into account the closure of some gas-fired power plants.

The item other renewables is incorporated and no distinction is made between technologies for distributing the mix, so that installed power is made according to the one that is most efficient.

Source: PNIEC

What it does add is the need for storage and demand management in order to encourage the integration of renewables and make the system more manageable. With respect to storage, the increase in this technology should be noted, with an additional 6 GW of power, providing greater management capacity for generation.

What is the concrete relationship between this type of international summit and specific transition plans?

The PNIEC estimates that in order to achieve the objectives, the necessary investment is 241 billion euros between 2021 and 2030, 80% of which is of private origin and 20% of public origin. Therefore, to achieve the objectives and therefore private investment are necessary summits, conferences…

Source: PNIEC

As for renewable energies, it estimates the necessary private investment at 91,764 million euros.  This investment is already underway and, as we have explained on other occasions, wind and solar photovoltaic generation with access permission, but even without service, already reaches 102.3 GW of installed power (24.7 and 77.6 GW respectively). If these GW were finally in service, they would far exceed the objectives of the PNIEC. But the physical connection of the transmission and distribution grid, as we have commented on other occasions, is not sufficient to support that power today.

What are the expectations worldwide?

According to data from the International Energy Agency, the expected growth in installed capacity by technology given the sustainable growth plans would be as follows:

Source: IEA

The IEA also expects the largest increase in investment in supply to come from renewables-based energy, which on average doubles the current level between 2019 and 2050. This is supported by additional spending on electricity grids and battery storage to ensure a reliable supply of electricity.

This transition process creates uncertainty and raises some questions for us:

Is the regulatory framework ready to support the new generation mix?

Will it have to be updated to take into account questions that have been raised for years in Europe, such as negative pool prices?

Will 80% of private investment be feasible with the historically high legislative risk that Spain has had?

Will these objectives be achievable and are they compatible with scenarios of slower economic growth?

Marta Serrano | Energy Consultant

By | 2020-02-13T14:47:52+00:00 February 13th, 2020|Categories: Energy Markets, Energy Policies, Featured, M·Blog, Spain|Tags: , , |0 Comments

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