ASSETS PROVIDING ‘FLEXIBILITY’ ARE KEY TO MAXIMIZING THE ROLE OF RENEWABLE ENERGY IN SPAIN AND CHILE

New reports show how batteries, dynamic electric vehicle charging and interconnectors will have major influence on emissions between now and 2050

Madrid and Santiago: Maximizing the role of solar and wind power in the electricity systems of Spain and Chile between now and 2050 will hinge on the extent to which ‘flexibility assets’ such as batteries and dynamic electric vehicle chargers are deployed and used. That is the conclusion of twin reports, published today by BloombergNEF (BNEF) in partnership with ACCIONA, the Madrid-based global renewable energy and infrastructure group.

Both Spain and Chile have world-class resources in sunshine and wind, and are therefore prime locations for the build-out of renewable energy over the next three decades. The BNEF reports model the outlook for the power generation mix of the two countries by 2050, based on various scenarios.

The reports come as negotiators from almost 200 countries – including Spain and Chile – gather for the COP25 climate change conference in Madrid, against a backdrop of urgent calls to cut emissions and keep the rise in global temperatures well below 2 degrees Celsius.

Both Spain and Chile have ambitious targets for decarbonizing their electricity systems, the former for renewable generation, and the latter for the retirement of its entire coal-fired power station fleet. But attaining these, or getting close, will require a focus on flexibility, as well as simply pouring money into increasingly cheap renewables.

‘Flexibility’ is provided by technologies that can rapidly increase or reduce the amount of electricity they deliver to the grid, depending on the balance between supply from generators and demand from businesses and consumers. Examples are stationary storage batteries, EV chargers that charge when electric prices are low rather than at peak periods, interconnectors to other countries, and – on the fossil fuel side – quick-response gas-fired power stations.

Diego Marquina, power analyst for BNEF and lead author of the Spain report, said: “We have modelled several scenarios for how the generation mix might evolve over the next three decades. This matters for investors in renewable energy, and also for emissions – because the more these countries have to rely on gas peaker plants, the more CO2 they will emit in 2050.”

Among the conclusions of the two reports are:

 

• • The base-case scenario for Spain shows wind and solar generating 51% of total electricity by 2030, and as much as 75% by 2050, thanks to the fact that they are the lowest-cost options in that country for generating power.
  • The base-case scenario for Chile shows wind and solar surging from supplying 13% of the country’s electricity now, to 40% by 2030, and 67% by 2050. The market is expected to be 93% supplied by all renewables in that year. In a coal phase-out scenario, the figure rises to 98%.
  • In Spain, in a scenario in which battery storage costs fall more rapidly than expected, the electricity system could need 13% less gas back-up capacity by 2050, have 12% fewer emissions, and accommodate up to 94% zero-carbon generation.
  • In Spain, in a scenario in which EVs are able to charge flexibly (to take advantage of hours of cheaper electricity), the added costs to the energy system of electrifying transport can be halved. It would also lead to 9% fewer emissions than in the base-case scenario.
  • An increase in interconnector capacity between Spain and France would enable the share of zero-carbon electricity to be increased relative to the base-case, and at slightly lower overall cost. However, the benefits are less obvious in the long-term as the interconnector utilization drops due to wind and solar over-generating more often in both countries simultaneously.
  • However, another scenario in which storage costs fail to come down as sharply as expected, would lead to 11% more emissions by 2050, and 3% higher system costs, than in the base case.
  • In Chile, wind and solar represent a $35 billion investment opportunity between now and 2050, and batteries an $8 billion opportunity.
  • In Chile, coal makes up 39% of electricity generation today and this is set to slide all the way to 6% in the base-case scenario, as it loses ground to cheaper wind and solar projects.