Spain, like the rest of the countries, increasingly needs to join to the energy transition and end dependence on fossil fuels once and for all. However, it seems that we are not doing these duties well. Since the end of the PSOE government in Spain in 2008, the PP under the command of Mariano Rajoy. Rajoy has not been a perfect example of energy transition, much less support for the development of renewable energies.
The Institute of Energy Economics and Financial Analysis has criticized excessive and expensive subsidies that exist in Spain for gas and coal plants through so-called capacity payments and that, according to this institution, cost 1.000 million euros a year. This is explained in a report that they have published and that is yet another proof that Spain is not following the path towards the energy transition, quite the contrary, it still intends to exploit the conventional energy business.
These capacity payments consist of mechanisms with which certain thermal plants are compensated for their function of supporting the electricity system when renewable energies are not available. That is, when not enough renewable energy is generated to cover energy demand, so as not to leave cities without electricity supply, these mechanisms are responsible for supply energy through fossil fuels. This has been in force in Spain since 1997.
In the face of such excessive and too expensive subsidies, a series of alternatives are suggested. One of the alternatives focuses on the Government not having the decision in this sector but rather that it is carried out an auction mechanism where more factors such as capacity via interconnections or storage batteries enter so as not to have to depend on these mechanisms that use fossil fuels.
They also point out that it is necessary to create a regulatory body with a greater degree of autonomy and an electricity market more transparent than better electricity price signals.
All these changes, according to the report they have published, would help to increase the economic competitiveness of the country and to advance to a more modern energy model. Spain is committed to improving the renewables sector to achieve final consumption 20% of the demand in 2020 and 27% in 2030. We currently only consume 17,3%.