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Should electrification be Spain's big strategy?

Should electrification be Spain's big strategy?

August 21, 2024
If we analyse the concept of the energy transition to a low-emissions economy, we find the curious paradox that anyone reading these lines can identify the ultimate goal of this transition: enabling the decarbonization of the economy and achieving climate neutrality by 2050. However, although we know where the finish line is, there are still doubts about the strategies needed to achieve this goal.

Original article in Spanish: La Razón

Author: Ángel Crespo, CEO of MET Energía España

In this long and complex process of decarbonizing an economy based on fossil fuels, the initial focus on replacing the most polluting electricity generation in the national system with renewable energy (solar, wind) is already yielding results. According to data from the Association of Renewable Energy Companies (APPA), in May of this year 63% of electricity generation in Spain came from renewable sources. Likewise, solar energy became the primary source contributing to the energy mix. This situation contrasts with that of other countries in our region, such as Italy, where this level of renewable production is expected to be reached in 11 years, by 2035.

In the next phase, another pillar of the energy transition will be the renewable electrification of all sectors that can adopt it. But is the road to electrification really that straightforward and feasible? What are the main challenges that could delay or impede this transformation?

There are many challenges and doubts about the real role of electrification and the strategies to be implemented for its penetration into Spain's productive and economic systems. First of all, it should be noted that despite the significant amounts of renewable generation installed to date – and according to data from the Ministry of Energy Transition – currently more than 48% of final energy in Spain, that is, the energy used for the production of electricity, still comes from petroleum products.

In other words, Spain continues to have a balance in which oil products, primarily for transport, remain very important. Although their share may progressively decrease in favour of energy with much less environmental impact and greater competitiveness (such as natural gas), the reliance on these energy sources to meet the country's needs remains significant and requires a different strategy from the one implemented so far. This necessitates changing the habits of small and medium-sized enterprises, as well as end consumers. And this cannot be achieved without financing and economic support.

We must also recognize that electrification does not reach all areas of the economy. There are energy-intensive sectors such as industry, shipping, aviation, and heavy transportation that, either due to competitiveness or a lack of available technology, would require renewable sources other than electricity (e.g., biofuels, biogas, hydrogen) to carry out their activities in a decarbonized and competitive manner.

For these sectors, electrification is not currently a feasible option. Therefore, other strategies must be established to reduce environmental impact, such as the use of natural gas, which can reduce emissions by 40-50% compared to coal and by 25-30% compared to fuel oil. It is also necessary to focus on the development of new renewable energy sources that can be used efficiently and cost-effectively in these sectors.

For all these reasons, the complex energy reality of today requires multiple and diverse solutions. In this sense, electrification is just one more step towards the construction of a robust national strategy that considers both the country's energy needs and the most coherent and feasible way to continue progressing along the path of energy transition.