Subsidy-free solar takes off in Spain

Solar energy is clean, local, job-intensive, easy to install, quick to deploy, simple to maintain… but expensive. That used to be the mantra that solar promoters had to bear over the years, and it seemed an effective reason to keep the power system relying on dirtier, but apparently cheaper energy sources. Solar photovoltaic technology has been available for a long time, but it needed public support to bring it to the market. Feed-in tariffs have been the most efficient support scheme.
Yet solar energy is running through its learning curve much quicker than anyone could have anticipated. And subsequently, the need for new plants to get economic support has become lower and lower. Today a solar panel costs some 80% less than just five years ago to yield the same power.  And costs are projected to lower by another 50% by 2020.
But we don’t need to wait any longer to get solar energy for less money than dirty energy sources. Solar energy has now crossed another historic threshold. At the end of last year, for the first time ever in Spain, a solar plant was switched to the grid to sell the electricity at wholesale market prices, that is, getting the same reward as any conventional power plant. No subsidy, no feed-in tariff.
The plant, developed by independent renewable company Enerpro, is located in the Southern Spain province of Seville. Step by step, the company is building the solar arrays, that follow the sun’s move from east to west every day. The first megawatt is already plugged in, and the company is working to complete the 2.5 MW of the plant at their 6 hectare field. They plan to connect 12 MW in different plants this year, and to start with plants 300 MW in size next year. All at pool prices, because the total cost of their electricity, including investment and O&M, makes it the cheapest in the pool, Enerpro says.
Enerpro is the first, but not the only one. Last year the Spanish electricity transmission system operator (Red Electrica de España), had received close to 200 applications for more than 40,000 MW of PV plants to connect to the Spanish grids. All those plants are waiting for procedural green light to access the grid, while their investors are valuing the fact that electricity from new PV plants can now compete in the market without any support system to make the investment profitable.
All those figures must be put in context to realize what they mean. Spain had at the end of 2013 a total of 4,681 MW of solar capacity, that supplied 3.2% of the yearly demand. If all those planned plants managed to access the power system, we could expect the solar PV yield to increase ten-fold, what would be equivalent to nearly one third of total demand. Considering that renewables already supplied 42.4% of the demand in the main (peninsular) system, it is clear that a full transformation of the power system towards a clean, renewable one is possible.
If technical reliability is put into question, it is interesting to realize that the Spanish system has already proved its ability to integrate up to 67% of electricity from variable sources (wind power record reached last Christmas day) with no blackouts or whatsoever. Utilities with large investments in coal may have other ideas however.
–  Jose Luis Garcia is head of the climate and energy unit, and the research and advocacy for Greenpeace Spain

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