agustín garcía universidad de extremadura (spain) and...
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Agustín García Universidad de Extremadura (Spain) and Global Development And Environment Institute (GDAE)
Iberian power: the path toward a more competitive and sustainable electricity market A. García,(1) & (2) M.T. García-Álvarez, (3) B. Moreno, (4) M. Caraus(2) y T. Iglesias(2)
(1)Global Development And Environment Institute (GDAE)-Tufts University, (2)University of Extremadura
(Spain),(3)University of A Coruna (Spain), and (4)University of Oviedo (Spain).
9TH BIENNIAL CONFERENCE JUNE 25-28 2017 Ecological Economics: From Theory to Practice Macalester College, St. Paul, Minnesota
Iberian electricity sector: a transition towards a more liberalized and sustainable market Agustín García, M. Teresa García-Álvarez y Blanca Moreno,
GDAE Working Paper 17-01: Iberian Electricity Sector
(http://ase.tufts.edu/gdae)
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Arthur Neslen Wednesday 18 May 2016
Iberian electricity sector: background
• Scarcity of fossil fuels. • Energy production fundamentally based on water resources and fuel imports.
• External energy dependence. • Sector’s configuration was different in comparison with developed countries • Uncompetitive sector.
• Out-of-date and unable to sustain an increasing demand.
3
GDP per capita (% over EU average). PPS.
Source: Eurostat
70
75
80
85
90
95
100
105
110
Spain Portugal EU (27) = 100%
1985
70%
65%
Iberian electricity sector: transition
EU reform aimed to a more competitive sector: • Prices can transmit the efficiency improvements to consumers
• Single market using regional electricity markets (MIBEL): spot – forward • There is still a high market concentration, especially in Portugal.
4
Market share of the largest electricity generator (% total generation)
Spain Portugal Germany France Italy UK
1999 51,8 57,8 28,1 93,8 71,1 21,0
2000 42,4 58,5 34,0 90,2 46,7 20,6
… … … … … … …
2013 22,0 43,9 32,0 83,8 27,0 29,3
2014 23,8 46,5 32,0 86,8 29,0 -
Iberian electricity sector: competitiveness
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Electricity prices in Spain , Portugal, Italy, France y Greece (1980 - 2014)
Source: IEA (2015c), Energy Prices and Taxes 2015 , Q3, www.iea.org/statistics/
Iberian electricity sector: sustainability
Renewables: Spain and Portugal led the energy transition. • Several objectives: environment, innovation, GDP, employment…
6
Installed electricity capacity (Spain – MW)
05.000
10.00015.00020.00025.00030.00035.00040.00045.00050.000
Hydro Wind Solar (PV+Thermal)
Installed electricity capacity (Portugal – MW)
0
2.000
4.000
6.000
8.000
10.000
Hydro Wind Geothermal Solar (PV+Thermal)
• Dependence on hydro (Portugal 30%)
• Nuclear energy is less important
• Need to ensure electricity supply • External dependence.
7
0%10%20%30%40%50%60%70%80%90%
100% Portugal
0%
20%
40%
60%
80%
100%Spain
0%
20%
40%
60%
80%
100%Portugal
Installed Hydro-electricity Capacity (%)
Source: Eurostat
Electricity production from hydro (%)
Source: Eurostat
0%10%20%30%40%50%60%70%80%90%
100% Spain
EU average 0%
20%
40%
60%
80%
100%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
España Portugal
Electricity production from hydro (%)
EU (15,4%)
EU (12,7%)
Iberian electricity sector: sustainability
Iberian electricity sector: wind
Portugal; wind capacity is close to 30 percent. Spain: second EU country-producer. 8
0%10%20%30%40%50%60%70%80%90%
100%Portugal
0%10%20%30%40%50%60%70%80%90%
100%Spain
01020304050607080
TWh (Spain & Portugal)
Installed Wind-electricity Capacity (%) and Win-electricity Production (TWh)
EU average
0,0
10,0
20,0
30,0
40,0
50,0
60,0
España PortugalSpain Portugal
Electricity production
Iberian electricity sector: solar
Spain: third largest producer in the EU.
Iberian solar sector: 10 percent of the European total.
Complex actual situation:
• break in incentives for new investment. • revision of the premiums.
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Solar panel area (1000 m2)
Source: Eurostat
Solar-electricity production (TWh)
Source: Eurostat
0500
1.0001.5002.0002.5003.0003.5004.0004.500
Spain Portugal
02468
10121416
Spain Portugal
Iberian electricity transition: assessment
Process assessment isn’t easy: depends on the point of view • high prices
• limited competition degree • consumers opinion • external dependence
• renewable deployment process • …
10
Energy imports (% of energy use)
102030405060708090
100
Portugal Spain OECD members
0
2
4
6
8
10
12
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Tone
lada
s mét
ricas
per
cáp
ita
UE España Portugal MundoSpain World
CO2 per capita emissions
Energy and economic growth Renewable deployment effects on Iberian economy:
• Employment. • Innovation. • GDP vs energy consumption.
11
Iberian electricity transition: assessment
Energy and economic growth Renewable deployment effects on Iberian economy:
• Employment. • Innovation. • GDP vs energy consumption.
12
Iberian electricity transition: assessment
• Germany, France, Spain
• Crises
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0
200 000
400 000
600 000
800 000
100 0000
120 0000
0
200 00
400 00
600 00
800 00
100 000
120 000
2008 2009 2010 2011 2012 2013 2014 2015
EU
Port
ugal
& S
pain
Employment in renewable (Portugal, Spain, EU)
Portugal España EU (no Spain & Portugal)
Iberian electricity transition: employment
14
186 .000.0 00
187 .000.0 00
188 .000.0 00
189 .000.0 00
190 .000.0 00
191 .000.0 00
192 .000.0 00
193 .000.0 00
194 .000.0 00
195 .000.0 00
0
200 000
400 000
600 000
800 000
100 0000
120 0000
2008 2009 2010 2011 2012 2013 2014 2015
Tota
l
Rene
wab
le se
ctor
Employment in renewable sector and total economy (EU*)
renewable total
15. 000.00 0
16. 000.00 0
17. 000.00 0
18. 000.00 0
19. 000.00 0
20. 000.00 0
21. 000.00 0
0
200 00
400 00
600 00
800 00
100 000
120 000
2008 2009 2010 2011 2012 2013 2014 2015
Tota
l
Rene
wab
le se
ctor
Employment in renewable sector and total economy (Spain)
renewable total
3.8 00.000
3.9 00.000
4.0 00.000
4.1 00.000
4.2 00.000
4.3 00.000
4.4 00.000
4.5 00.000
4.6 00.000
4.7 00.000
4.8 00.000
4.9 00.000
0
500 0
100 00
150 00
200 00
250 00
2008 2009 2010 2011 2012 2013 2014 2015
Tota
l
Rene
wab
le se
ctor
Employment in renewable sector and total economy (Portugal)
renewable total
Iberian electricity transition: employment
15
34%
24%
11%
10%
11%
1% 2%
6%
1% 0%
Spain 11%
34%
31%
3%
7%
1% 9%
2% 1% 1%
Portugal
29%
28% 10%
10%
8%
6%
4% 3%
1% 1% European Union Viento
Biomasa
Bombas de calor
Fotovoltaíca
Biocarburantes
Biogás
Hidroeléctrica
Solar térmica
Residuos
Geotérmica
Wind
Biomass
Heat pumps
Photovoltaic
Biofuels
Biogas
Hydro
Solar thermal
Waste
Geothermal
• Spain:
Similar to EU Wind (1/3 total renewable employment) IDEA (2011): ∆=150% in 5 years (2020)
• Portugal: Biomass Henriques et al. (2015): ∆=50% in 5 years (2020)
Iberian electricity transition: employment
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Applications related with Climate Change (2004-2015)
Source: Spanish Patent and Trademark Office (2016).
National patents National utility models Total national inventions Indirect technologies 11.9%
Solar thermal 35.1%
Wind 24.2%
Photovoltaic 11.9%
Marine 5.5%
Bioenergy 5.4%
Hydro 5.2%
E. Geothermal 0.7%
Public body 13%
Individuals 36%
Companies 51%
• Spain:
Iberian electricity transition: innovation
Energy and GDP (Causality) • Neutrality hypothesis. • Conservation hypothesis: from GDP to energy. • Growth hypothesis: from energy to GDP. • Feedback hypothesis: bidirectional causality.
Bidirectional causality (Apergis and Payne, 2012)
(Maybe) a negative effect between renewable and economic growth in Spain and Portugal (Silva et al., 2011)
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Economic growth
• Annual data: 1990-2015
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Causality test (Spain, Portugal and EU26). Energy consumption Country Energy Contrasted hypothesis Prob. Result hypothesis
Spain Renewable GDP vs renewable consumption 17% ∆GDP ≠ ∆energy growth
Renewable consumption vs GDP 1% ∆energy → ∆GDP
Spain Non-renewable GDP vs non-renewable consumption 64% ∆GDP ≠ ∆energy Neutrality / growth
Non-renewable consumption vs GDP 6% ∆energy → ∆GDP
Portugal Renewable GDP vs renewable consumption 3% ∆GDP → ∆energy conservation
Renewable consumption vs GDP 47% ∆energía ≠ ∆GDP
Portugal Non-renewable GDP vs non-renewable consumption 5% ∆GDP → ∆energy conservation
Non-renewable consumption vs GDP 41% ∆energía ≠ ∆GDP
EU Renewable GDP vs renewable consumption 51% ∆GDP ≠ ∆energy neutrality
Renewable consumption vs GDP 40% ∆energía ≠ ∆GDP
EU Non-renewable GDP vs non-renewable consumption 20% ∆GDP ≠ ∆energy neutrality
Non-renewable consumption vs GDP 99% ∆energía ≠ ∆GDP
Causality test (Spain and Portugal). Energy consumption Country Energy Contrasted hypothesis Prob. Result hypothesis
Spain total GDP vs energy consumption 8% ∆GDP → ∆energy conservation Energy consumption vs GDP 64% ∆energía ≠ ∆GDP
Portugal total GDP vs energy consumption 7% ∆GDP → ∆energy conservation Energy consumption vs GDP 30% ∆energía ≠ ∆GDP
• Causality? • Aggregation?
Iberian electricity transition: economic growth
• Causality?
• Aggregation?
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Causality test (Spain and Portugal). Energy consumption by electricity production source Country Energy Contrasted hypothesis Prob. Result hypothesis
Spain
Gas GDP vs energy consumption 7% ∆GDP → ∆energy feedback Energy consumption vs GDP 3% ∆energy → ∆GDP
Nuclear GDP vs energy consumption 74% ∆GDP ≠ ∆energy neutrality Energy consumption vs GDP 26% ∆energy ≠ ∆GDP
Petroleum GDP vs energy consumption Energy consumption vs GDP
2% 93%
∆GDP → ∆energy ∆energy ≠ ∆GDP conservation
solid fuel GDP vs energy consumption Energy consumption vs GDP
0% 88%
∆GDP → ∆energy ∆energy ≠ ∆GDP conservation
solar GDP vs energy consumption Energy consumption vs GDP
3% 36%
∆GDP → ∆energy ∆energy ≠ ∆GDP conservation
wind GDP vs energy consumption Energy consumption vs GDP
4% 0%
∆GDP → ∆energy ∆energy → ∆GDP feedback
Portugal
Gas GDP vs energy consumption Energy consumption vs GDP
50% 2%
∆GDP ≠ ∆energy ∆energy → ∆GDP growth
Nuclear GDP vs energy consumption Energy consumption vs GDP
- -
- - -
Petroleum GDP vs energy consumption Energy consumption vs GDP
1% 57%
∆GDP → ∆energy ∆energy ≠ ∆GDP conservation
solid fuel GDP vs energy consumption Energy consumption vs GDP
13% 1%
∆GDP ≠ ∆energy ∆energy → ∆GDP growth
solar GDP vs energy consumption Energy consumption vs GDP
16% 73%
∆GDP ≠ ∆energy ∆energy ≠ ∆GDP neutrality
wind GDP vs energy consumption Energy consumption vs GDP
11% 11%
∆GDP ≠ ∆energy ∆energía ≠ ∆GDP neutrality (feedback )
Iberian electricity transition: economic growth
• Capacity vs consumption
20
Causality test (Spain and Portugal). Installed energy capacity by source Country Energy Contrasted hypothesis Prob. Result hypothesis
Spain
Total capacity GDP vs energy capacity Energy capacity vs GDP
0% 99%
∆GDP → ∆energy ∆energy ≠ ∆GDP conservation
Nuclear GDP vs energy capacity Energy capacity vs GDP
94% 17%
∆GDP ≠ ∆energy ∆energy ≠ ∆GDP neutrality
Fuel GDP vs energy capacity Energy capacity vs GDP
2% 62%
∆GDP → ∆energy ∆energy ≠ ∆GDP conservation
solar GDP vs energy capacity Energy capacity vs GDP
5% 2%
∆GDP → ∆energy ∆energy → ∆GDP feedback
wind GDP vs energy capacity Energy capacity vs GDP
4% 0%
∆GDP → ∆energy ∆energy → ∆GDP feedback
hydro GDP vs energy capacity Energy capacity vs GDP
1% 84%
∆GDP → ∆energy ∆energy ≠ ∆GDP conservation
others GDP vs energy capacity Energy capacity vs GDP
24% 67%
∆GDP ≠ ∆energy ∆energy ≠ ∆GDP neutrality
Portugal
Total capacity GDP vs energy capacity Energy capacity vs GDP
44% 66%
∆GDP ≠ ∆energy ∆energy ≠ ∆GDP neutrality
Nuclear GDP vs energy capacity Energy capacity vs GDP
- -
- - -
Fuel GDP vs energy capacity Energy capacity vs GDP
5% 61%
∆GDP → ∆energy ∆energy ≠ ∆GDP conservation
solar GDP vs energy capacity Energy capacity vs GDP
28% 37%
∆GDP ≠ ∆energy ∆energy ≠ ∆GDP neutrality
wind GDP vs energy capacity Energy capacity vs GDP
23% 86%
∆GDP ≠ ∆energy ∆energy ≠ ∆GDP neutrality
hydro GDP vs energy capacity Energy capacity vs GDP
94% 5%
∆GDP ≠ ∆energy ∆energy → ∆GDP growth
others GDP vs energy capacity Energy capacity vs GDP
5% 49%
∆GDP → ∆energy ∆energy ≠ ∆GDP conservation
Iberian electricity transition: economic growth
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In short: • Process evaluation isn’t easy: different goals and different points of view
• Renewable deployment process vs economic growth and modernization: • GDP: some evidence, specifically for Spain and for capacity (wind) • Employment:
• Spain: wind • Portugal: biomass
• Innovation (Spain): increase in patents (wind and solar) • GDP, employment and innovation: negative effects of financial crises
• Future: • European and international agreements • National policy incentives • Problems:
• Electricity market: high prices, limited competition degree, consumers opinion,… • External dependence (and hydro dependence).
• …
Iberian electricity transition: assessment
Thank you [email protected]
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9TH BIENNIAL CONFERENCE JUNE 25-28 2017 Ecological Economics: From Theory to Practice Macalester College, St. Paul, Minnesota