Spain should support its domestic natural gas-fired power plants to be available to provide electricity when needed, and such regulation is "urgent and necessary," according to the president of Spanish gas industry association Sedigas.
The so-called capacity mechanism would pay gas power plants to be available for generation when necessary, amid soaring shares of the intermittent solar and wind power generation.
"We hope that the regulation enabling the deployment of capacity mechanisms can materialise quickly," Sedigas president Joan Batalla said on Thursday, as quoted by Reuters.
Gas-fired power plants could provide essential baseload capacity in case of lower renewables output, according to Batalla. Operating gas plants has become more expensive as they are now in stand-by, start-up, or shut-down modes most of the time, the official added.
Early this year, Spanish power prices tumbled in February to a fraction of the price in neighboring France as record wind and solar power generation in Spain has triggered an extreme slump in prices.
Cheap power prices have hurt the profits of Spanish utilities but they have been a boon to consumers as retail prices have reflected lower wholesale electricity prices.
Last year, renewables made up 50.8% of Spain's electricity mix, rising from a 42.2% share in 2022.
More than half of the electricity Spain now consumes comes from renewable energy sources, and total renewable generation topped 135,000 GWh last year, up from 116,695 GWh in 2022, Energy Transition Minister Teresa Ribera said in December.
Spain has made substantial investments in solar and wind capacity over the last 10 years, while hydropower, which used to be Spain's largest source of renewable energy, currently accounts for about 10% of its total generation.
Spain outpaced its European counterparts in the deployment of solar and wind power capacity in 2023, securing second position in onshore wind installations, according to Rystad Energy.
Although Germany maintains dominance in solar and onshore wind, "Spain's trajectory in solar and wind energy exhibits remarkable growth prospects for the coming years," Rystad Energy said.
By Michael Kern for Oilprice.com
Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, More
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