The virtuous circle of electrification

Summary of the presentation by the Chairman of Red Eléctrica, José Folgado, at the conference "Keys to the future of renewable energy" held at the premises of the Association of Economists of Cantabria.

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The European policy for the union of energy has been traditionally conceived with the idea of being built on three essential pillars: security of supply, economic competitiveness and environmental sustainability. The efforts and actions of countries, not only in Europe but throughout the world, have focused more on the first two, leaving environmental sustainability in the arena of principles and purposes that have not yet been fulfilled. In recent times this is changing, as demonstrated by the COP21 in Paris, as pertains to global commitments to limit emissions of greenhouse gases to prevent global warming, estimated at a maximum of 2°C, at the end of the 21st century, above the existing temperature at the start of the industrialization era.

To achieve these three objectives in a balanced way there are, above all, three fronts for action: savings and energy efficiency, sustainable mobility and renewable electricity generation. For various reasons -economic crisis and rising electricity prices, LED lamps, more efficient appliances and energy efficiency measures in buildings-, significant progress has been made in the EU to reduce the energy intensity per unit of GDP, and also in Spain. Efficiency has also been achieved in transport, but this aspect only accounts for a third of all emissions, therefore the continued growth in the number of electric vehicles and the use of rail transport instead of conventional combustion cars will be the determining factor in contributing to the third pillar; environmental sustainability. That is, electricity closes the virtuous circle of the three pillars if and when the power generation itself is based on sustainable means, i.e. renewable sources. Greater electrification in the daily activity and life of society, provided it is done, above all, using renewable sources, will be the determining factor that finally will pave the road to avoid the catastrophic consequences for the planet to which we are doomed based on the current growth trends in greenhouse gases in the world.

The problem of intermittency or non-manageability of most renewable energies, particularly wind and solar photovoltaic, is yet to be resolved. Therefore, it seems inevitable that natural gas and combined cycle power stations will continue to play, for some time yet, the supporting role in renewables, especially if current nuclear power stations are not replaced at the end of their useful life. However, these combined cycle plants also pollute, although less. Therefore, closing the virtuous circle of sustainable electrification is currently linked to two other support elements: international interconnections and energy storage, which today is limited to pumped-storage hydroelectric power stations. Fortunately Spain currently has a pumped-storage capacity of 5,000 MW, though it would be necessary to double this capacity. Furthermore, the Barcelona European Council of March 2002, the Lisbon Treaty of 2009 and the Council of October 2014 have made it clear that interconnections, that should allow an exchange capacity of at least 10% of the installed power capacity, are decisive for the construction of union of energy. The agreement reached in the summit in Madrid in March 2015 corroborates this and encompasses three new interconnections between Spain and France, allowing the capacity to increase from the current 2900 MW to 8000 MW.

These investments and the implementation of the Network Codes to build a homogeneous European electricity market will represent the essential cornerstone in order to generate 100% renewable electricity as of 2050, as is being proposed in the European Parliament. In this scenario, Spain will have a lot of room for growth on the path for greater deployment of renewable energy and it will allow the reduction of one of the limiting growth factors not only due to the imbalance generated by energy in the trade balance but also in greenhouse gas emissions, particularly by mass transport by road.

We are, therefore, at the gates of the deployment of a new global energy model in which Red Eléctrica will have to play a very relevant role as transmission agent and as operator of the electricity system.