Macroeconomic Impact of RES in Spain-2010

Study of the Macroeconomic Impact of Renewable Energies in Spain
YEAR 2010
Study of the Macroeconomic Impact of Renewable Energies in Spain

YEAR 2010
Elaborated by: Deloitte www.deloitte.com Edited by: Spanish Renwable Energy Association | APPA www.appa.es Designed by: Estudio 91nueveuno www.nueveuno.com English version of this study provided by: APPA and Holtrop S.L.P. Transaction and Business Law
STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010
Index
Executive Summary ...................................................................................................................... 5 The Study ..................................................................................................................................... 15 Penetration of renewable energies in Spain .............................................................................. 19 The Renewable Energy Sector: economic evaluation ................................................................ 23 Employment generated by the renewable energy sector .......................................................... 73 Impact of renewable energies in the environment and in energy dependence ....................... 77 Renewable energies incentives resulting from electricity generation....................................... 91 Economic impact in the wholesale electricity market derived from renewable energies belonging to the special regime ................................................................. 95 The electricity tariff deficit and the saving provided by renewable energies in the Spanish electricity market ............................................................... 99 The cost of electricity supply in Spain ...................................................................................... 103 Comparison between the evolution of historical cost of adjustment services, capacity payments and losses in the system, and the level of penetration of renewable energy ................................................................... 111 Efforts of renewable energies developers to connect their installations to the grid.............. 117 Impact on human health .......................................................................................................... 121 The energy policy objectives and renewable energies .............................................................. 125 Conclusions ................................................................................................................................ 135 Index of figures ......................................................................................................................................138
Executive Summary
The.year.2010.has.been.an.exercise.with.economic.and.social. conflicting. results:. while. the. contribution. to. GDP. of. the. Renewable. Energy. Sector(1). has. increased. by. 8.2%. compared. to.2009,.this.growth.has.not.been.reflected.in.higher.levels.of. employment,.being.suppressed.during.the.last.twelve.months,. approximately. five. thousand. direct. and. induced. jobs.. The aggregated data for 2008-2010 further show the difficult situation the Sector is facing, as there are about twenty thousand lost jobs during that period.
This trend of job losses, which had already been observed in 2009, is mainly caused by the reduction of activity levels of auxiliary industries of almost all technologies, including wind power, solar energy, biomass, small hydro power and biofuels. Contrary to the results of employment, the Sector contribution to GDP has increased, although this effect is solely due to an increase in income from energy producers and marketers (not producers) of biofuels. The uncertainty caused by the lack of a compensation for some technologies from 2013 onwards has made it impossible for project promoters to develop new
1 Unless otherwise specified, Renewable Energy Sector means the activities executed by renewable energies of the special regime, marine energy, small wind energy, geothermal energy, and biofuels.
investment, assuming a reduction in equipment manufacturing activities and provision of specialized services. Likewise, the biofuels production capacity is underutilized, replacing domestic production with imports. In this context, the goal of reaching 12% of total energy demand in Spain in 2010 to be covered by renewable energy, required by Law of 27 November on the Electricity Sector, has not been met, reaching just 11.3 %. It must be pointed out that this percentage has been obtained in an exceptionally high hydraulic year: considering the average
Executive Summary
hydraulic year, then the percentage of primary energy consumption from renewable sources in Spain would have been 10.4%, so there would be a differential even bigger with the established targets. The main results obtained in the 2010 update of the macroeconomic study of the Renewable Energy Sector are presented below: The total contribution of the Renewable Energy Sector to the GDP of Spain has been approximately ten billion euro, representing 0.94% of Spains GDP. The Renewable Energy Sector employed a total of 111,455 people in 2010 of which 54,925 correspond to direct employment and 56,530 to induced employment(2). These data represent a drop in employment in 2010 of approximately 5,000 jobs.
In this sense, wind power, biomass, small hydro power, solar photovoltaic and biofuels registered a fall in the number of employees both direct and induced, while concentrated solar power experienced an increase in jobs associated with this technology (mainly induced) as a result of the installation of approximately 250 MW in 2010. Electricity production from renewable energies of the special regime has reached 60,012 GWh in 2010, 21.8% of total electricity consumption in that year. This has avoided the emission of more than 32 million tonnes of CO2 equivalent into the atmosphere, representing a saving in respect of emission allowances of more than 467 million of euro. In accumulated terms, during the period 20052010 the emission of more than 145 million
FIGURE 1
Direct, induced and total contribution to Spains GDP of the Renewable Energy Sector (2005-2010)
2 The update of this report includes as induced contribution to GDP of the Concentrated Solar Power Sector the plants under construction during the years 2008, 2009 and 2010 that were not counted in previous editions, as part of the balance sheets of construction companies and those not belonging properly to the Renewable Energy Sector. In this sense, it has been modified the induced contribution to GDP of both this technology and the whole Renewable Energy Sector.
tonnes of CO2 was avoided, roughly 2483.5 million of constant (2010 base). In 2015 and 2020, due to the penetration of renewable energy capacity of the special regime foreseen in the draft PER 2011-2020(3), annual savings of 43.8 million and 59.1 million tons of CO2, respectively would be produced. Moreover, the use of biofuels for transport prevented 3.8 million tons of CO2 emissions in 2010.
The generation of electricity using renewable energy avoided imports of over 12.6 million tonnes of oil equivalent (toe) in 2010. Savings by replacing fossil fuel imports amounted to 2302.2 million , about 0.22% of GDP in Spain that year. The cumulative savings for the period 20052010 amount to 11,168.3 million of constant (2010 base).
FIGURE 2
Direct and induced employment of the Renewable Energies Sector
3 Draft Renewable Energy Plan 2011-2020, of July 26, 2011, Ministry of Industry, Tourism and Trade.
Executive Summary
FIGURE 3
CO2 Emissions equivalent avoided by renewable energy production
According to the calculations carried out: Electricity generation from renewable energies avoided imports of approximately 12.6 million tonnes of oil equivalent (toe) in 2010. In 2020 this figure would exceed 24.5 million toe. The substitution of imported fossil fuel by biofuel in 2010 was 1,194,312 toe of biodiesel and 235,819 toe of bioethanol, which represented, in terms of energy a 5.00% and a 3.88% of total consumption of diesel and petrol, respectively. The difference between incentives received and benefits generated by renewable energies (CO2 allowances savings and substituted
4 Power guarantee and technical restrictions not included.
imports of fossil fuels) was negative in 2010 due to the increase of the amounts of feed-in tariffs received by photovoltaic in 2009 (in 2010 they have been virtually identical), and to a lesser extent by wind power and concentrated solar power. Electricity generation from renewable energies of the special regime assumes that the marginal price set forth in the Daily Market is lower than the one obtained in the absence of such technologies. Renewable energies replace conventional generation units with a high marginal cost that would set higher marginal prices.This cheapening was of 4847.2 million ( 21.92 / MWh)(4) in 2010. In addition, it has been studied the evolution of the main cost components of electricity
FIGURE 4
Evolution of the substitution of fossil fuel imports (tons of oil equivalent)
FIGURE 5
Comparison between the economic impact derived from avoided CO2 emissions and reduction in energy dependence, and of the feed-in tariffs received by the Renewable Energy Sector
Executive Summary
FIGURE 6
Annual depreciation due to the penetration of renewable energies in the OMEL Daily Market
supply in Spain in recent years, according to information published by the National Energy Regulator (Commisin Nacional de Energa) and the results of the Spanish electricity market. The study reveals that:
by 42.6%, natural gas prices by 28.6% and coal imported by 52%, while the cost paid for generated electricity was reduced by 4.4% in / MWh.
1. The payments for the generated electricity,

sum of the payments made to the ordinary regime and the special regime for the period 2005-2010, grew at an annual average of 3.9%, lower than the total costs of electricity supply, 4.6%.
3. The growth of demand in this period was

much lower compared to the increase in installed capacity: 5.8% during the period, compared with an increase in installed capacity of 34.1%(5), from a coverage rate that in 2005 was already sufficient. Broken down by generation technologies, the installed capacity of combined cycle natural gas power plants was the one that increased most during the period 2005-2010, 13,389
2. The growth in payments for generated

electricity has been lower than the evolution of fossil fuel prices: a barrel of oil has increased
5
Source: Spanish Transmission System Operator (Red Elctrica de Espaa)
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FIGURE 7
Comparison between the evolution of the price index of fossil fuels and the payments for the generated electricity
FIGURE 8
Cumulative growth of installed capacity vs. electricity demand.
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Executive Summary
MW, followed by wind power with 9,554 MW and the other renewable energies (mainly solar photovoltaic and concentrated solar power), 4,517 MW.
As a result of the analysis of investments in grid connection infrastructure undertaken by the promoters of renewable energies, it has been estimated that they would amount to 1504.5 million for the period 2002-2010.
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FIGURE 9
Installed capacity of Coal, Combined Cycles (Natural Gas), Wind Power and Other Renewable Energies of the Special Regime. Source: Spanish Transmission System Operator (Red Elctrica de Espaa) and National Energy Regulator (Comisin Nacional de Energa)
FIGURE 10
Estimated investment in grid connection infrastructure (2002-2010)
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The Study
The.Renewable.Energy.industry.in.Spain.has.been.an.engine.of. economic.growth.and.territorial.development.in.recent.years.. The.penetration.of.these.technologies.has.helped.to.fulfill.the. commitments.made.by.our.country.for.the.reduction.of.longterm.environmental.effects.and.the.high.cost.and.risk.involved. in.having.a.high.energy.dependence.
Both for its activity figures as well as for the number of jobs it generates, the Renewable Energy Sector is undoubtedly one of the references of our economy worldwide. This fact is more evident if you look at the figures relating to exports of goods and services, direct investment by Spanish companies abroad, the competitive positioning of said companies in different markets or demand for skilled professionals in our country. However, in the last two years, the Renewable Energy Sector has developed unevenly in its different technologies and sub-sectors of activity. While energy producers have seen a sustained growth in its contribution to GDP, these increases have not been reflected in the manufacturing industries of equipments and components, or in the provision of specific services. In 2009 and 2010, the sectors evolution has been influenced by the uncertainty generated from the publication of the Royal Decree Law 6 / 2009, as well as by the effects of the economical crisis and the emergence of new international competitors with more competitive costs structures. The existing uncertainty in the absence of a regulatory framework for some technologies from 2013 onwards has conditioned the investments of the companies, and therefore the installation of new capacity. The lower
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The Study
activity of the national companies has made them loose some of its competitive position against foreign competitors. In this sense, for the future it would be paradoxical that having a domestic industry that was at the vanguard of technology very recently, the objectives for 2020 must be met by importing equipments and components from abroad.
Environmental
Contribution of renewable energies in avoiding the emission of greenhouse gases (GHG) and other harmful gases. Contribution to achieving the objectives of penetration of renewable energy.
Energy Policy
Contribution of renewable energies in terms of energy dependence: substitution of the imports of coal, natural gas and derivates of crude oil, and economic assessment of the impact of reducing energy dependence.
The Scope
The following study evaluates quantitatively the impact derived from the development of renewable energies from different points of view in Spain in the last years:
Evaluation of other externalities

according to the arguments in which there is a wide scientific consensus. The scope of the analysis of the economic impact of renewable energies in Spain includes the following sectors: Biofuels Biomass Wind power Geothermal high/low temperature and depth. Small hydropower Marine Small wind energy Concentrated Solar Power Solar Photovoltaic
Economic and social

Direct contribution from the renewable energy sector and the different subsectors to the GDP in nominal and real terms from three perspectives: value added by each activity, final demand and remuneration of the factors contributing to the development of the activity. Import and export of the sector and relevance of Spanish companies internationally. Indirect impact on the rest of the economy through spillover effects quantified with an input-output model. Taxes paid by the renewable energy sector. Technological Development: relevance of the industry in R&D investments. Creation of direct and induced employment by the sector.
Additionally, the study includes the following analysis: The economic quantification, according to a statistical sampling of the efforts renewable energy developers have made to connect their facilities to the grid.
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A comparative evaluation of the goals established by the National Renewable Energy Action Plan (NREAP) and those foreseen by the draft of the Renewable Energy Plan 2020.
The quantification of the savings produced by renewable energies in the electricity wholesale market resulting from the existence of renewable energies. The evolution of the components of the electricity tariff for the period 2005-2010.
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Penetration of renewable energies in Spain

The. year. 2010. has. shown. a. significant. increase. in. the. penetration.of.renewable.energies.in.Spain.in.terms.of.installed. capacity.and.power.as.well.as.of.energy.production:
Primary energy consumption from renewable sources in Spain in 2010 amounted to 11.3%, representing a relevant increase compared to 9.5% in 2009: however, the objective established in Law 54 / 1997, of the Electricity Sector, of 12% has not been achieved (subsequently neither the objective foreseen in the PER 2005-2010 (12.1%). It has to be noted that this percentage, 11.3%, has been met within an exceptionally high hydraulic year: considering an average hydraulic year, the percentage of primary energy consumption from renewable sources in Spain would have been 10.4%, so that the differential with the established targets would have been even bigger. The production of electricity from renewable energies of the special regime reached 60,012 GWh, representing 21.8% of total electricity demand in 2010(6). Wind power continues being the technology producing the most electricity, with approximately 71.8% of the total special regime, followed by solar technologies (photovoltaic and concentrated solar power) with 11.7%, small hydro with 11.2% and biomass with 5.2%. In terms of installed capacity, the total renewable capacity belonging to the special regime was, at December 31, 2010, of 26,746 MW. By technologies, wind power is the most proliferated, with 19,649 MW, the rest of the capacity is divided between solar
6 Sources: Renewable generation under the special regime, the National Energy Regulator (Comisin Nacional de Energa); electricity demand, Spanish Transmission System Operator (Red Elctrica de Espaa).
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Penetration of renewable energies in Spain
photovoltaic and concentrated solar power (3,847 MW and 532 MW, respectively), hydro power (2,004 MW) and biomass (714 MW). By region, Andalusia, Castile-La Mancha, Castile and Len and Galicia are the geographic areas with the highest amount of installed renewable energy capacity.
In 2010, the consumption of biofuels in Spain accounted for in terms of energy, 4.79% of motor fuels, with a market share of 5.00% of biodiesel over diesel fuels and for 3.88% of bioethanol with regard to petrol (compared to 3.67% and 2.49% in the previous year, respectively).
FIGURE 11
Installed capacity for electricity generation by technology of the special regime (MW) by the end of 2010. Source: National Energy Regulator (Comisin Nacional de Energa)
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FIGURE 12
Penetration of biofuels in Spain in terms of energy content. Source: APPA
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The Renewable Energy Sector: economic evaluation

Macroeconomic Impact of renewable energies
The following shows the evolution of key macroeconomic variables with respect to the Renewable Energy Sector in Spain during 2010: The direct contribution(7) to GDP of Spains Renewable Energy Sector in 2010 amounted to 6,744.0 million , compared to 6,170.5 million in 2009, in nominal terms. Evaluated in constant euro of 2010, the direct contribution to GDP of the Renewable
7 Including the activities of promoters of facilities, energy producers, equipment and components manufacturers, and renewable energy services providers.
Energy Sector grew by 8.2% with regard to 2009. In terms of comparison with the total of the economy, the direct contribution of the Spanish Renewable Energy Sector represented approximately 0.63% of Spains GDP in 2010. The difference between the growth rates of the different components of GDP compared to 2009 reflects some of the main features of the evolution of the Renewable Energy Sector in 2010: There has been an increase in industry revenue, amounting to approximately 26,000 million , mainly due to the increase of
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FIGURE 13
Direct Contribution of the Renewable Energy Sector to Spains GDP (2005-2010)
FIGURE 14
Growth rate of the Renewable Energy Sector in Spain (2005-2010)
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energy sales of producers of wind power, hydro power and biomass, similar income levels as in 2009 for photovoltaic producers, and the incorporation of the producers of concentrated solar power of the plants installed between 2006 and 2009. On the other hand, marketers (not producers) of biofuels have seen an increase in their income by raising the quantities consumed as a result of compliance with the obligation of penetration of such fuels. However, as it happened in 2009, the revenue growth of electricity producers as well as marketers (not producers) of biofuels has not been translated into an employment growth. In this sense, all the technologies listed above, except for concentrated solar power, have lost jobs during 2010. This is due to ancillary industries that have reduced their level of activity: in the case of technologies for generating electricity, for the low level of installed capacity in 2010, and in the case of biofuels, because of fuel
imports which resulted in an underutilization of installed capacity, having a negative impact on direct employment, as well as the import of raw materials and its impact on indirect employment. The amounts satisfied in terms of salaries and wages to workers in the sector have been reduced by 3.2% due to staff reductions experienced in 2010. The consumption of fixed capital (depreciation) increased by 23.2%. The exports of the Renewable Energy Sector still exceed the imports and consequently the sector shows a positive trade balance. However, it should be noted that the difference between exports and imports has been reduced significantly since 2008, from 1,246.8 million to 657.0 million , both in constant terms (2010 base), mainly due to an increase of biofuels imports. This fact represents a decrease of approximately 46.5% of the trade surplus in that period.
FIGURE 15
Relevance of the direct contribution to GDP of the Renewable Energy Sector with respect to GDP of Spain
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While both concepts, exports and imports, experienced a growth during 2010, the first increased at a rate of 5.4% while the latter increased at 10.2%. The most relevant facts related to exports of goods and services during 2010 have been a slight increase in the export of equipment and services related to solar photovoltaic
and a cyclical increase in exports of biodiesel to Italy. Regarding imports, the subsector of biodiesel has been seriously affected once again by the trade policies applied in third countries so that it cannot compete with imported products from Argentina, mainly, and Indonesia.
FIGURE 16
Direct contribution to GDP of the Renewable Energy Sector (2005-2010) million of current
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Additionally, it should be noted that while the growth of the concentrated solar power industry in Spain has led to a rise in imports of equipment, it currently exists in our country the ability to develop a very high percentage of plants with domestic products, which can be a competitive advantage in the future, and which in turn could result in potential exports once the sector is developed in other countries. In terms of direct presence abroad, 143 companies with direct activity in other countries have been identified, with an active volume of more than 28 billion .
It is important to remark that when comparing the evolution of the GDP contribution of the Renewable Energy Sector versus the energy sector as a whole, or the whole Spanish economy, renewable energies have grown faster than the rest during the last five years. As mentioned above, when analyzing the different technologies a similar trend is observed among almost all of them: in 2010 there was an increase in revenues for energy producers and marketers of biofuels (not producers) that has not resulted in an increase of the auxiliary industry revenues and production of biofuels nor in creation of employment.
FIGURE 17
Direct contribution to GDP of the Renewable Energy Sector (2005-2010) million of constant (base 2010)
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FIGURE 18
Impact of the renewable energy sector in exports and imports, and net exports in the period 2006-2010 (million of constant base 2010)
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The exception in 2010 was mainly concentrated solar power, whose increased contribution to GDP is mainly the result of the installation of new plants than of the sale of energy. Likewise, technologies less developed in Spain, such as geothermal, marine power and small wind power, continue with development activities and the introduction of technology, although their contribution to GDP remains low in comparative terms. In the future, the evolution of the contribution to GDP of the different technologies will depend on the growth of its installed capacity
in Spain, and the ratio of use of it, the penetration of biofuels in the market, the price of energy sold and the ability to compete against new international scenarios. All of these variables, in turn, will very much depend on the evolution of the following factors: The establishment of the new remuneration model for the energies of the special regime in 2013. In this sense, the existence of a stable and predictable regulatory framework, and that properly assess the investments to be made by the promoters of these technologies is essential to eliminate uncertainty and mitigate risks arising from these projects.
FIGURE 19
Comparison between annual growth rates of Spains GDP and the contributions to GDP of the Energy and Renewable Energy Sector
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FIGURE 20
Direct contribution to GDP of the different technologies (million of current )
FIGURE 21
Growth rate of the different technologies in constant terms
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The market prices of fuels and weather conditions (rainfall and temperature), which determine the market price of electricity. The existing difficulty at the administrative level to obtain permits and licenses for carrying out the different projects. The development of market models that may allow a higher number of forward contracts which reduce the uncertainty regarding the behaviour of prices. The establishment of schemes to manage portfolios of different generation technologies allowing to cover the excess or deficit
of generation with energy from other technologies. The presentation of the programs to the Market Operator and the System Operator at times closer to the dispatch of energy. The establishment of a regulatory mechanism that allows reducing the impact on the biofuels production sector of the restrictive trade practices from competitors of other countries as well as more ambitious mandatory targets of biofuels use for the coming years.
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Fiscal Balance
Additionally, from the information compiled by the companies from the sector, the amounts paid by them rwgarding national and local taxes have been identified, as well as the subsidies they have received.
During the period analyzed, 2005-2010, the sector has been a net contributor in all periods; this means that the taxes paid have surpassed the funds received in the form of subsidies(8). In 2010, the difference between the taxes paid and subsidies received has been of 747.6 million .
FIGURE 22
Fiscal impact of the Renewable Energy Sector in Spain
8 Operating subsidies for exploitation from the European Union, Autonomous Communities and the remaining Public Administrations.
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Contribution to R&D&I
Investment in R & D & I in 2010 was approximately 302.8 million , approximately 4.5% of the total contribution to GDP of the Renewable Energy Sector. This percentage is
much higher than the national average, which in 2009(9) stood at 1.38% of the GDP. This high difference is due to the fact that this is an evolving technology sector and, indeed, some of the technologies such as marine and geothermal energy develop mainly R & D & I activities.
FIGURE 23
Efforts in R +D + i with respect to GDP
9 Source: Spanish National Institute for Statistics, 2009 is the last year having available information
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Induced Impact on GDP

From the use of input-output tables constructed specifically for the Renewable Energy Sector, there have been calculated induced impact coefficients of an increase in final demand for each of the technologies. These coefficients represent the spillover effect of an economic sector in the other branches of the economy. During 2010, the induced impact on GDP of the Renewable Energy Sector amounted up to
3,254.3 million . Adding up the direct and induced contribution, the total contribution of the Renewable Energy Sector to the GDP of Spain reached almost 10,000 million , representing approximately 0.94% of Spains GDP. The most relevant features of the different technologies are detailed below: Although the contribution to GDP of the wind power sector has been reduced, this technology is still the one generating the
FIGURE 24
Direct, induced and total contribution to Spains GDP of the Renewable Energy Sector (2005-2010)
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greatest induced contribution, as there is a strong network of ancillary industries. In 2010, this contribution was higher than 1,171.0 million , and if it is added to its direct contribution, then its weight within the whole Renewable Energy Sector amounts to 29.8%. The growth of induced contribution to GDP of the concentrated solar power sector is very important in 2008, 2009 and 2010, which
this last year was approximately of 1,013.3 million ; when added to these amounts the direct contribution, its weight within the whole Sector amounts up to 16.5%. It should be noted that the update of this report includes as induced contribution to GDP of the Concentrated Solar Power Sector the plants under construction over these years, as it is part of the balance sheets
FIGURE 25
Relevance of the Renewable Energy Sector in terms of Spains GDP, period 2005-2010
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of construction companies, being 2010 a year especially relevant in terms of induced impact of this technology. Photovoltaic solar energy has a lower induced contribution: 354.2 million . Its total contribution (direct plus induced) remains very relevant as a result of income received from the sale of energy. Induced contribution coefficients of technologies such as biomass, small hydro power and biofuels have been reduced since
the growth of these subsectors has occurred mainly because of the sale of energy and not because of an increased level of activity in industrial areas. For this reason, in real terms, the induced contribution has remained unchanged despite the increased direct contribution. The small wind, geothermal and marine energy technologies are still not relevant in terms of its contribution to GDP, provided that they globally do not reach 1% of the Renewable Energy Sector.
FIGURE 26
Percentage distribution of contribution to Spains GDP segmented by the different renewable technologies (2010)
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FIGURE 27
Direct and induced contribution to GDP breakdown by technologies
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Economic Impact: biofuels

The total contribution to GDP of the biofuels sector was 494.0 million in 2010: 334.8 million as a direct contribution and 159.2 million as induced contribution. This total figure represents a growth of 39.7% of contribution to GDP compared to 2009. Despite the figures recorded in the contribution to GDP of this sector, it is important to note that the observed growth came mainly due to the increased consumption of such type of fuels derived from the major use obligations set
for 2010 and from the commercial margins by oil operators in the sale of biofuels. Aggravated to what happened in 2009, the domestic production of biodiesel is in a critical situation, since most of the supply of this fuel by the oil operators is carried out by using imports from countries that, in many cases, develop business practices that may restrict competition, against which domestic factories cannot compete. Broken down by type of biofuel, the total contribution to GDP of the subsector of
FIGURE 28
Contribution to the GDP of the Biofuels Sector
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biodiesel amounted to 328.9 million in 2010, while the bioethanol contribution accounted for 165.1 million . In terms of fulfillment of the consumption targets, in 2010 the overall requirement of 5.83% was not met, being the proportion of biofuels over the total motor fuel at 4.79% in energy terms. Despite not having achieved the legally fixed overall target set for 2010, the result slightly exceeded the 4.78% that the Resolution of the Ministry of Energy, of January 7, 2011, set forth as the minimum percentage required for obliged subjects to be achieved by
2010 in order to avoid being forced to make compensation payments. At an individual level by type of biofuel, the goal of bioethanol in petrol was missed by a narrow margin, reaching a rate of 3.88% compared to 3.9% set as mandatory. Instead, the objective of biodiesel in diesel itself was exceeded, reaching 5.00%. The Royal Decree 1738/2010 of 23 December fixed new global mandatory targets for biofuels of 5.9%, 6.0% and 6.1% for the years 2011, 2012 and 2013, respectively. In February
FIGURE 29
Growth rates of the Biofuels Sector in real terms
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FIGURE 30
Direct and induced contribution to GDP by type of biofuel
FIGURE 31
Level of penetration of biofuels in Spain
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2011, as a result of supply problems and risks arising from the riots in northern Africa, the Council of Ministers amended these objectives by means of the Royal Decree 459/2011, of April 1, approving an increase in both the global biofuels obligations, which amounted to 6.2%, 6.5% and 6.5% for 2011, 2012 and 2013, respectively, as well as the obligations of biofuels in diesel, which rose from 3.9%, 4.1% and 4.1% for 2011, 2012 and 2013, respectively, to 6% for 2011 and 7.0% for 2012 and 2013. The objectives of biofuels in petrol remained, however, at the same percentages fixed by the RD 1738/2010 (3.9%, 4.1% and 4.1% for 2011, 2012 and 2013, respectively). The cumulative consumption of biofuels in 2010 is estimated to have increased by 35.3% from 2009 to 2010 from 1,264,647 tonnes to 1,711,122 tonnes. However, as it already occurred in 2009, this increase in consumption has not beentranslated in 2010 into an equivalent increase in production and sales of the Spanish manufacturing industry in the domestic market because, for example, over 60% of the consumption of biodiesel was satisfied by imports. This situation, greatly aggravated in 2010, as explained in the following sections, has led to the paralysis of the Spanish biodiesel industry.
produced from this raw material is only taxed with a gross rate of 20%. As Argentina and Indonesia are among the worlds leading producers of palm oil and soy bean oil, respectively, they mark the reference prices of these raw materials. The fact of applying differential rates does generate a significant competitive advantage over producers from around the world using the same raw materials. Therefore, in order that the above mentioned increase of the obligation of biodiesel in transport up to 7% for 2012 and 2013 is positive for the production sector in Spain, it is necessary to take urgent steps to block anticompetitive practices of biodiesel imports from Argentina and Indonesia. While waiting for the adoption of such measures, the fact is that, although Spanish industry has more than twice the capacity needed to supply the obligations of biodiesel consumption in diesel legally set, about 75% of the 48 biodiesel manufacturing plants remain stalled because of these imports, the vast majority of the remaining plants are operating at idle speed. The shutdown of a large part of the factories and the underutilization of the capacity of many other factories are provoking a severe situation in the sector, causing that many companies are actually in a very delicate situation, being forced to close down or at least, to cease temporarily their activities. In this context it is worth mentioning that the Ministry of Industry, Tourism and Trade in October 2010 presented a draft Ministerial Order with the purposes of promoting EU production of biodiesel by establishing a procedure for annual allocation of up to five million tonnes of production between Spanish facilities and the rest facilities of the European Union. While this draft Ministerial Order was favorably reported by the National Energy Commission and the Council of State, its final approval remains stalled since June 2011, despite its adoption being of vital importance for the survival of the Spanish biodiesel industry.
The biodiesel case

The biodiesel consumption in Spain rose in 2010 to a total of 1,349,538 tonnes, representing an increase of 31.2% compared to 2009. Although a part of this increase was supplied by domestic production, approximately 60% of domestic consumption has been provided by imports, mainly from Argentina and Indonesia. In 2010 a total of 825,000 tonnes of pure biodiesel were imported, from which a 53% stemmed from Argentina and 24% from Indonesia. The inability of the Spanish industry to compete with biodiesel coming from these two countries is due to the system of differential export taxes that these countries apply. For instance, Argentina applies an export rate of soybean oil of 32%, while biodiesel
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FIGURE 32
Percentage of utilization of production capacity of biodiesel plants in Spain
The bioethanol case

The consumption of bioethanol has been of 361,584 tonnes in 2010, representing an increase of 53% over the previous year. However, this increase of consumption has not been accompanied with a corresponding increase in sales in the domestic market of the four existing bioethanol plants in Spain. The production of these plants in relation to its capacity was, nevertheless, much higher than that of biodiesel stations, reaching percentages close to 80%, mainly thanks to exports, which in 2010 accounted for 48% of the sales. Although the Spanish bioethanol industry is in a better position than its biodiesel industry, its total sales in 2010 only increased by 3% compared to 2009, its exports were reduced, while the imports to the Spanish market
increased by 142% with regard to the previous year until having gained about half of the Spanish market for bioethanol. This set of trends draw a panorama that, if not reversed properly, can also put the bioethanol production subsection in Spain in a difficult position. The aforementioned increase of imports came mainly for regulatory reasons, which contributed to delay the possibility of direct blending of bioethanol and gasoline. This led the oil operators to massively increase imports of ETBE, mainly from the United States, Netherlands and Brazil. Since the automotive gasoline consumption in Spain is still much lower than that of diesel, bioethanol has represented in 2010 21.1% of the total of biofuels used, a slightly higher percentage than the one achieved in 2009 (18.8 %).
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Economic Impact: biomass

The biomass sector increased its contribution to GDP in 2010 compared to 2009, reaching 1,089.2 million . From this figure,702.9 million correspond to the direct impact and the remaining 386.3 million to the induced impact. In real terms, this represented an increase of 3.3% over the previous year. Among the reasons for this evolution is primarily a growth in revenue from the sale of electricity: 17.9% in 2010, although this growth has not been reflected in an increase of industrial activity of the technology.
It is important to remark that the potential of biomass is still largely untapped in Spain: this technology in 2010 only produced 1.4% of the countrys electricity and the installed capacity has not met the targets fixed in the PER 20052010, 2039 MW. This fact turns biomass into the sole technology of the special regime that has seen its objectives reduced in the draft of the PER 2011-2020 compared to the previous Plan, jeopardizing the development of the sector that reduces its weight within the mix of renewable energies in the objectives established compared to the previous Plan.
FIGURE 33
Contribution to the GDP of the Biomass Sector
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FIGURE 34
Growth rates of the Biomass Sector
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FIGURE 35
Evolution of installed capacity and energy sold of the Biomass Sector
The development of biomass below its potential is even more relevant when considering the advantages it has, and the possibilities it has in our country in terms of: The energy generated from biomass is manageable: it is always available, it is constant and predictable, and can be adjusted perfectly to the electricity demand. It allows hybridization with other renewable technologies, as for example concentrated solar power.
Generation of employment as being labour intensive, not only in the activity of energy production, but also in the fuel supply, the cleaning of forests, ... Reducing emissions of greenhouse gases, both by the substitution of fossil fuels as well as by avoiding emissions resulting from the decomposition of waste. Additional positive environmental effects since the processes by which the biomass is obtained includes the cleaning of forests (fire
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FIGURE 36
Biomass target according to PER 2005-2010 and situation in 2010. Source: National Energy Regulator (Comisin Nacional de Energa)
FIGURE 37
Revision of the biomass targets in the draft of the PER 2011-2020
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prevention) and the capacity of enhancing waste, thereby reducing the pollution caused by burning or burying most of these wastes. Revitalization and development of the Spanish rural area. The main obstacles that have prevented the development of this technology in our country are: Lack of a compensation system that ensures obtaining a reasonable profitability of the installations. There is a risk of raw materials supply: longterm contracts with suppliers have to be agreed, incorporating adequate guarantees. Supply prices are volatile and must be agreed with suppliers. The technology is very heterogeneous with a degree of maturity lower than other technologies.
Economic Impact: wind power

In the last two years, the wind energy sector has suffered a major contraction in its levels of activity by installing a lower average number of megawatts than those recorded in previous years in Spain, reducing its competitive position with the emergence of strong competition from companies located in countries with more competitive cost structures. Despite the effects of the reduction in income, the wind energy sector remains the most widespread renewable technology in Spain, both in terms of installed capacity and electricity generation. This is a very important contribution to GDP within the renewable energy mix. In 2010, the contribution of this technology amounted up to 2,984.3 million , of which 1,813.3 million correspond to the direct contribution and 1,171.0 million to the one induced.
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FIGURE 38
Contribution to the GDP of the Wind Energy Sector
In real terms, the wind power sector as a whole suffered a fall of 6.9% in comparison to 2009. The reduction in industrial activity was very important, and only the increase in revenues from energy producers and the stability of prices in the electricity market cushioned this fall. The reduction in the contribution to GDP has had a very relevant impact in terms of job losses: in 2009 and 2010 more than 10,000 direct and induced jobs were eliminated.
Regarding the penetration targets, according to the data published by the National Energy Commission, wind power has not reached the target of 20,155 MW established in the PER 2005-2010(10). Looking ahead, the draft of the PER 20112020 sets as target 35,000 MW for onshore wind and 750 MW regarding offshore wind: the wind energy industry can meet these objectives as demonstrated in recent years, although it will be essential to overcome the obstacles that are slowing down its development.
10 Considering the installed capacity data published by the Spanish Transmission System Operator (Red Elctrica de Espaa), said target had been exceeded.
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FIGURE 39
Growth rates of the Wind Energy Sector
FIGURE 40
Fulfillment of the wind energy targets in the PER 2005-2010. Source: National Energy Regulator (Comisin Nacional de Energa)
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The future of wind energy in Spain

During the period 2003-2008, the wind power was a reference of progress not only in Spain but also in the global industry, experiencing a positive and stable growth over time. The year 2009 represented a turning point in the evolution of the sector: the uncertainty created by the lack of a compensation framework as of 2013 onwards has significantly reduced activity levels of domestic firms. It is important to note that in 2010 the installed wind power capacity worldwide grew by 22.5% compared to 2009. The lack of certainty regarding the remuneration of wind power (as well as the rest of renewable energies) represents a barrier that significantly slows the development of future projects, affecting the entire industry value chain of the Sector. Wind developers are faced with an additional problem regarding access to financing: financial institutions can not lend money without knowing an estimate of the revenues from the sale of electricity. To this fact it must be added the emergence of numerous competitors who are able to offer
products at more competitive prices because of its beneficial cost structures. While in 2008 the third and ninth most important wind turbine manufacturer globally in relation to the number of megawatts sold were Spanish, in 2010 only one of them is ranked eighth. In this context, the manufacturers of wind turbine and of specific components have lost competitiveness in international markets. In order to retake the path of growth and increase competitiveness, it is necessary to address the following issues: The establishment of a predictable and stable regulatory framework. Realignment of the business models, focusing the efforts on those activities with the highest added value. A commitment to R&D& and innovation with the aim of differentiating products. A reduction of the requirements fixed by the Autonomous Communities in wind power tenders, especially those not related to the industry.
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Economic Impact: geothermal energy

Geothermal energy is the technology that makes use of the energy that can be found under the surface of the earth in the form of heat, in specific conditions of pressure and temperature. Depending on the characteristics of the resource, the stored heat can be used for electricity production and / or for heating purposes.
While in Spain the high temperature geothermal energy, the one that produces electricity and needs higher temperature conditions is currently in a study phase of the development potential, the technology for the use of low temperature geothermal energy is more developed: There exists in the market a wide range of geothermal heat pumps that allow the use of such energy for hot water production, cooling and heating.
FIGURE 41
Contribution to the GDP of the High Temperature Geothermal Energy Sector
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High Temperature Geothermal Energy

The high temperature geothermal energy sector contributed in 2010 with over 13.8 million to the GDP in Spain, corresponding mainly to R&D and innovation activities aimed at evaluating the development potencial of this technology in our country. The development of the high temperature geothermal energy can be an important tool for meeting the goals of renewable energy penetration for 2020, being an easily manageable energy by using heat from the earth capable of operating twenty-four hours
a day. The potential of high-temperature geothermal resources in our country is estimated at approximately 3,000 MW for the generation of electricity. The draft of the PER 2011-2020 sets a target of 50 MW for the year 2020, which would begin to be installed as from 2017. The technological challenges faced in achieving this goal are related to success in research and development of new drilling methods that allow the reduction of the risks and costs of the technology as well as to the development of new technologies of stimulated geothermal energy (EGS).
FIGURE 42
Growth rates of the High Temperature Geothermal Energy Sector
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Low Temperature Geothermal Energy

The contribution of the Low Temperature Geothermal Energy Sector in 2010 to Spains GDP amounted to over 14.95 million . The technology needed for the use of low temperature geothermal energy is developed, as it exists in the market a wide range of heat pumps that allow the use of this energy for hot water production, cooling and heating. Some of the advantages of low temperature geothermal energy are:
It is a technology with a very high energy yield. It is an inexhaustible and self-sufficient resource, which can operate continuously producing significant cost savings over its lifetime. It has no negative sound or visual impact and no adverse effects in the subsoil. It provides energy and cost savings compared to traditional air conditioning systems.
FIGURE 43
Contribution to the GDP of the Low Temperature Geothermal Energy Sector
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The draft of the PER 2011-2020 establishes a target of 50,000 toe for the year 2020 for thermal uses of this technology, through direct application in spas and air conditioning and heat pumps that can produce air conditioning and (sanitary) hot water. For the coming years, this technology presents challenges of reducing the cost of thermal generation and increasing the efficiency of geothermal heat pumps. The further development of this technology requires: To promote a comprehensive support for the technology of low temperature geothermal energy by the institutions.
To promote the formation of sector agents and achieve the official standardization of equipment: installer license, official seal for optimum facilities. To develop more standardized regulations, by harmonizing rules and procedures for installation between the different autonomous communities. To disseminate the technology to different sectors of the population, both to professionals and users, in order to combat the general ignorance that exists related to this technology.
FIGURE 44
Growth rates of the Low Temperature Geothermal Sector
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Economic Impact: marine energy

Marine energy contributed with approximately 9.7 million to the GDP in 2010, from which 7.7 million correspond to the direct impact and 2.0 million to the induced impact. Marine energy is currently in a research phase, mainly focusing on demonstration projects that exist today to identify the most efficient prototypes to be comercialized. There is not yet in our country an industrial and commercial business similar to that of other renewable
technologies, but there is an important commitment from the business sector (which has the support of several autonomous administrations). The development of national technology for different kinds of prototypes and investment in technology demonstration centers suggests an important industrial growth in the area of wave power. Currently, the real generation costs are high, being out of the commercial range. The way to reduce current costs lies in achieving a learning rate that allows its estimation regardless of the designs as well as an adequate support system to speed up the process.
FIGURE 45
Contribution to the GDP of the Marine Energy Sector
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The reduction of costs is feasible through short-term R&D (improved design concepts and engineering optimization), or by learning from experience and exploration in the longer term (economies of scale and learning). In any case, achieving technological maturity all will depend on the learning rate, which shall accelerate the process more or less thanks to the success of the first plants, as well as on the commitment of sponsors and the support of the Administration.
Resource Study
During 2010, the study entrusted by the Institute for Diversification and Saving of Energy (IDAE) called Study of Evaluation of the Potential of Wave Energy in Spain has been published with the aim of producing an atlas of potential of the wave energy resource for the entire Spanish coast for its integration into the Renewable Energy Plan 2011-2020. From this study, which has been carried out by the Hydraulic Institute of Cantabria, it can be
FIGURE 46
Growth rates of the Marine Energy Sector
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concluded that Spain has a significant marine energy potential, in which for the characteristics of our coast, the wave energy offers a resource of high quality for its viability and development. Galicia shows the highest values of energy potential, with an average power on depths between 40 and 45 kW / m. The Bay of Biscay is, in second place, the next area of the coastline in terms of resource (about 30 kW / m decreasing from West to East). Thirdly, the north faade of the Canary Islands (with 20 kW / m). Finally, the south faade of the Canary Islands, together with the Spanish Mediterranean and the Gulf of Cadiz show annual average values of less than 10 kW / m. The publication of this document, together with the national objectives in this sector, will be
the starting point for the expected growth of the marine renewable energy sector in Spain. The draft of the PER 2011-2020 foresees the installation of a capacity of 100 MW for 2020. Likewise, this document notes that currently, the costs of marine energy generation are high and not competitive with other technologies, therefore the installation of commercial plants is not expected in the short-term although it is considered the possibility of installing smallscale plants in a shorter period of time. Likewise, several Technology Development Centers are planned or are in operation in Asturias, Cantabria, Basque Country and the Canary Islands, which will focus on research, development, testing and operation of power converters obtained from the waves of high sea.
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The importance of the Technology Demonstration Centers

The development of the first projects related to Sea energy uses requires an adequate infrastructure for electric evacuation, which in some European Union countries are beginning to be projected: Portugal, United Kingdom... Thus, there is an opportunity to technologists to test their prototypes at real scale grid connected in excellent waves and tides conditions. As in Europe, in Spain there are several projects to develop Technology Centers for testing and standardizations of prototypes and equipment under development. Some of the projects or Technology Testing Centers to be noted are the following: In the Basque Country, BIMEP (Biscay Marine Energy Platform): infrastructure for research, demonstration and operation of systems to capture energy from sea waves, which will allow manufacturers of these systems installing their equipment in its research infrastrucures, as well as carrying out tests and approving and certifying prototypes and equipment in development. The total capacity of the Technology Center will be 20 MW. In Cantabria, is being developed an energy node of wave power of 2 MW in Santoa, as well as a testing center for marine systems (waves and wind) in the Ubiarco region, with a capacity of connection, still to be determined, of about 20 MW, which will allow the connection of large floating wind turbines, but also the connection of systems able to use wave energy. In the Canary Islands, the PLOCAN Project, a scientific and technological infrastructure of individual character with the aim of facilitating the access and to store a test bench for the use of ocean energy (off-shore wind power, wave power, ocean currents, etc.,) shall be fully operational in 2011. Finally, in Asturias, there is a project to build an electrical infrastructure that shall allow boosting R & D & innovation activities as regards prototypes of marine energy use for
evacuation of power. (NEMO Project: Marine Electric Node). In the coming years, the development of marine energy in Spain presents the following challenges: At technology level, functionality of the devices must be achieved in the short term as well as its reliability in a medium-term. It will be necessary to conduct further tests on a global scale in the sea in order to know the productivities and the environmental impacts that may have the technology. Likewise, it will be necessary to solve the challenges of connecting this energy to the electricity grid. At regulatory level, excessive permits are currently required to develop the projects, so that it will be necessary to speed up the processes of processing and granting of licenses as well as of the authorisations for carrying out the projects. To promote a national strategy to establish an attractive legal framework (economic incentives and simplification of administrative procedures) to enable the development of a sector with a great potential and great business, economic and environmental opportunities.
Economic Impact: small wind energy

The contribution of the small wind energy sector to the GDP of Spain in 2010 exceeded 52.8 million : 39.0 million of direct contribution and 13.9 million of induced contribution. These figures represented an increase of 14.2% in real terms. A greater development of small wind power can result in improved utilization of wind energy in a more distributed manner, with greater integration in urban, industrial and rural areas. The administration has been showing its interest in developing a sector that has an
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FIGURE 47
Contribution to GDP of the Small Wind Energy Sector
important market potential, and that will enable the creation of a business network linked to employment in a distributed manner throughout the country. During 2010, the sector has been witness, together with the Administration, of several milestones that will establish the framework of the small wind energy (or small wind power) during the next few years, and that may result in the final takeoff of the national sector. The reception of all agents in the sector has been positive, since it seems that
it begins to take shape a horizon in which small wind energy, with its character of distributed energy, can be a further renewable technology for the energy mix. On the one hand, in June 2010, the Government of Spain, following the indications of the European Directive 2009/28/EC on the promotion of renewable energy (which established the obligation of Member States to develop a National Renewable Energy Action Plan, NREAP 2011-2020), sent the document to the European Commission.
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In this document, for the first time the small wind energy was included in the National Energy Planning for 2020 and a series of measures to promote small wind power, as well as to achieve the implementation of 370 MW in that period was established. Among the measures established in the Spanish NREAP 2011-2020, are remarked the Specific regulatory processing and the establishment of a suitable remunerative framework so as to provide incentives for small wind facilities (...), Set up accreditation systems for low power wind energy installers and Develop a suitable framework whereby to simplify, standardize and unify administrative procedures for the authorisation of renewable energy installations, including simple notification.
Likewise, for the first time, the draft PER 2011-2020 establishes a differentiation at regulatory and remunerative level of the small wind energy, by fixing a capacity target of 300 MW for small wind power for 2020. The establishment of differentiated targets for small wind energy can produce a major boost for this technology in Spain, since our country has a strong national business network at an international level, consisting of manufacturers, promoters and producers who offer high quality products, both for integration in housing and for conenction to the grid. Up to 100,000 small wind energy installations are expected to be installed in the country over the next ten years if the objectives of the draft of the PER 2011-2020 are met.
FIGURE 48
Growth Rates of the Small Wind Power Sector
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In this sense, it is necessary to facilitate the administrative procedure of small wind power installations and its connection to distribution grids. The draft of the PER 2011-2020 also considers that the remuneration framework has to take into account the specific features of small wind power relative to the current state of this technology, its costs and its advantages. In March 2010, the Ministry of Industry, Tourism and Commerce, published a draft Royal Decree of Connections of Small electricity generation facilities, with the aim of simplifying administrative procedures for installations up to 100 kW that are connected to the grid (so far it was one of the greatest barriers to small wind power penetration) and encouraging self-consumption. Likewise, this draft Royal Decree stipulated an abbreviated connection procedure for installations under 10 kW, also opening the door to the Net Metering (the sale and billing of the difference between the net electrical energy produced by the power generation facility and the electricity consumed by the electrical consumer). This regulation was finally adopted through the Royal Decree 1699/2011 of 18th of November. For all the abovementioned, there is still much work to do for small wind energy to become
a reality in Spain, so the sector is working on two aspects that are deemed essential: the certification of the equipment and the regulation at municipal level: As for the certification of equipment, there is an international standard, IEC 614002, but it is very expensive for the volume of business existing in Spain today. That is why work is underway to establish a national certification procedure (rigorous while flexible) that support the proliferation of safe and efficient facilities so that the sector can develop in an orderly manner once the new legislation comes into effect. It is of vital importance to prevent the entry into the market of wind turbines that do not meet the minimum standards of quality and that can undermine the market and consumer confidence. The European Directive 2009/28/EC on the promotion of renewable energy urges local authorities to incorporate ordinances regarding the use of renewable energy. At municipal level, public administrations are addressing important initiatives to promote renewable energy sources. In this sense, during 2010 the sector has worked together with interested institutions, in a document that establishes guidelines to facilitate the installation and construction of small
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wind energy systems at municipal level and which are subject to reasonable restrictions, preserving health and public safety. Thus, it aims to unify criteria and to ensure quality installations that allow an orderly growth of small wind energy in Spain. Establishing a legislation (now nonexistent) to set forth certain minimum requirements on noise and vibration; providing municipalities with the procedure of small wind installations, removing the complexity and the lack of knowledge that exists today; introducing energy criteria in building projects, improving environmental conditions in cities, and finally showing the possibilities of generating clean and local energy (education and awareness building). Small wind energy has important advantages compared to other renewable technologies. The following can be highlighted: It has a greater potential of overall efficiency than big wind power installations, because it prevents the losses that may occur in transmission and distribution grids. It enables the provision of electricity in isolated areas and remote from the electricity grid. Its use does not require the construction of new electricity infrastructures. Furthermore, it is not necessary to carry out significant works for the installation of small wind turbines. It can be combined with photovoltaic at hybrid installations. The devices support speeds up to 200 kilometers per hour and have a useful life of 15-20 years. It produces electricity at low wind speeds. It has a really low visual and noise impact. As can be deduced from the international experiences that demonstrate the possibility of penetration of small wind power in the electrical system, wherever the conventional grid has a principal implantation, the
application of small wind power in distributed generation is considered as a large market opportunity at global level. Spanish companies are well positioned to compete in the market, not only nationally but also internationally, and they only require a regulatory and remunerative framework that enables the orderly growth of the domestic market. This will require a specific regulation to be approved as soon as possible in order to encourage the market and the definitive maturation of the technology, as it has occured in other technologies. This process of industrialization will enable the quick reduction of manufacturing costs and to improve the profitability of the installations connected to the grid. Thus, the projects will pay-off in a reasonable time, the industry will respond positively and the Spanish market will be definitively developed (as it is happening in other countries like the UK, U.S., Ireland, Portugal, Italy and the Netherlands) and will generate qualified employment at local level (boost of the auxiliary industry, of installers, etc...).
Economic Impact: small hydropower

The total contribution of the Small Hydro Energy Sector to the GDP in 2010 was 554.4 million , of which 406.4 million in a direct manner and 147.9 million in an induced manner. This has represented an increase in the contribution to GDP in real terms, of approximately 9.1% in comparison to 2009. Like it occurs with other technologies the main factor explaining the increase in the contribution to GDP was the increase of revenues of the Sector from sales of energy. In this sense, 2010 has been an exceptionally good year at the hydraulic level and electrical power production has exceeded 6,700 GWh. This represents approximately 2.4% of the electricity consumption in Spain and an increase of 21.4% over the previous year, when the production was of 5,200 GWh. Despite the strong increase in small hydro power production, the annual installed capacity remains limited: in 2010 only 13 MW were
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FIGURE 49
Contribution to GDP of the Small Hydro Sector
installed, accumulating a total of 2,004 MW in Spain. The lack of power installation of this technology has not allowed to meet the targets set in the PER 2005-2010: 2,199 MW. The reasons behind the non-installation of new capacity are the risk arising from this type of projects and administrative barriers that cause that obtaining permits and licenses for the installation of power is a difficult and costly process in terms of time and resources. The draft of the PER 2011-2020 refers to the development potential of this technology in our country, citing as technological challenges
to obtain the maximum efficiency, to improve yields and reduce costs. However, the Plan also notes that the specific measures set for the sector focus mainly on the promotion of hydroelectric development of existing hydro infrastructures (dams, channels, water supply systems, etc.) as well as to the rehabilitation and modernization of existing hydropower plants. In this sense, the objective for 2020 is very similar to the target set in the PER 2005-2010. Its fulfillment depends on the ability to solve the problems mentioned above and in speeding up the granting of permits and licenses.
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FIGURE 50
Growth rates of the Small Hydro Sector in real terms
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FIGURE 51
Evolution of installed capacity and electricity generation of Small Hydropower (period 2005-2010)
FIGURE 52
Level of penetration of Small Hydro for the generation of electricity in Spain (2010) and energy policy objectives established in the PER 2005-2010
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Economic Impact: solar photovoltaic

The direct contribution to the GDP of the Photovoltaic Sector increased in 2010 to 2,774.9 million , with 354.2 million of induced contribution. The total contribution to GDP has been 3129.1 million , being the renewable technology with the highest contribution to GDP in that year.
However, as in 2009, the high contribution to the GDP of this technology is given mainly by the entry into operation of over 2,500 MW in 2008 and the resulting increase in revenue from the sale of energy. As mentioned throughout this document, the increased contribution to GDP did not translate into job creation, on the contrary, in the photovoltaic industry more than 15,000 jobs were lost in 2009 (direct and induced jobs)
FIGURE 53
Contribution to the GDP of the Solar Photovoltaic Energy Sector
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resulting from the scarce power installation in 2010 of only 199 MW. Likewise, 2010 has been a peculiar year in terms of regulatory changes of the Sector: Royal Decree 1003/2010, regulating the payment of the equivalent premium for the facilities producing electricity based on photovoltaic technology in the special regime. Royal Decree 1565/2010 of 19 November, regulating and amending certain aspects of the activity of electricity production in the special regime.
Royal Decree-Law 14/2010 of 23 December, laying down urgent measures to correct the tariff deficit in the electricity sector. Royal Decree 1565/2010 include the adoption of technical measures which represent an additional cost to the investments already made by having to introduce new equipments and procedures, and a limitation of the number of years with the right of perceiving incentives to 25. In this sense, the R.D. 1565/2010 represents a significant reduction regarding project income and the obligation to carry out not remunerated investments.
FIGURE 54
Growth rates of the Solar Photovoltaic Energy Sector in real terms
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Meanwhile, Royal Decree-Law 14/2010, introduces two limitations regarding the equivalent operating hours for which the plant owners are entitled to receive the photovoltaics tariff: the first affects all facilities depending on their geographic location. The second, of temporary character, applies for 2011, 2012 and 2013, and is a major difficulty that threatens the ability of the owners of the facilities to meet its financial commitments. In this sense, today there have been thousands of appeals against the application of these regulations: it is unquestionable that this regulatory uncertainty discourages investment in our country.
In this context, in the immediate future we do not see a trend reversal, especially if one considers that the draft of the PER 2011-2020 envisages the installation of approximately 350 MW photovoltaic annually up to 7,250 MW in 2020, while for example Germany, installed 7400 MW only in 2010. The difficulties being experienced by the photovoltaic industry in addition means wasting the take-off of a technology that has seen a major advance in its learning curve, increased equipment efficiency and their price reduction, making it much more competitive with other technologies. These effects are evident if one looks for example at the international level, the market grew by 130.6%.
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Economic Impact: concentrated solar power

The direct contribution to the GDP in 2010 of the concentrated solar power sector went up to 637.1 million and the induced contribution(11) to 1,013.3 million . The total contribution to GDP in 2010 was 1,650.4 million . These figures represent an increase in real terms of approximately 38.3% over 2009, the year that had already seen a growth of 62.5%.
Unlike other renewable technologies, the concentrated solar power sector has not based its growth in 2010 in increased income from energy sales. The greater part of its contribution to GDP derives from the construction of plants. Being a technology that requires an initial investment per megawatt very relevant, about three to four times that of wind power, the increase in installed capacity in our country experienced in 2008, 2009 and 2010 has placed concentrated solar power as the third renewable technology in contribution to GDP.
FIGURE 55
Contribution to the GDP of the Concentrated Solar Power Sector
11 The update of this report includes as induced contribution to the GDP of the concentrated solar power sector the plants under construction during the years 2008, 2009 and 2010 that were not counted in previous editions, as part of the balance sheets of construction companies and not those belonging properly to the Renewable Energy Sector. In this regard, it has been modified the induced contribution to GDP both of this technology and of the whole of Renewable Energy Sector.
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It is important to note that concentrated solar power has exceeded the targets set in the PER 2005-2010. 2010 Spain is the world leader in this technology, with approximately 50% of the installed capacity worldwide. Looking ahead, the draft of the PER 20112020 set a target of 4,800 MW by 2020: the fulfillment of this objective will depend on the remuneration framework to be established from 2013 onwards and the capacity of the technology itself to increase its yields and achieve a reduction in investment costs and operation and maintenance. The concentrated solar power currently has four different technological solutions: channel or parabolic trough, central or tower receiver, linear reflectors type Fresnel and parabolic dishes with Stirling engines. Although at present the plants based on channel or parabolic trough technology are those that dominate the market, each of the mentioned
solutions could find its niche, adapting to the characteristics and requirements specific of each case. Concentrated solar power entails very important advantages: Spain has abundant solar resource Is intensive in job creation during the construction phase and also during the operation and maintenance phase Is possible to provide these facilities with storage devices, therfore these plants can modulate the delivery of electricity to the system. They can facilitate the integration of other technologies into the grid such as solar photovoltaic or wind power and there exists the possibility of hybridizing with other forms of renewable energy such as biomass.
FIGURE 56
Growth rates of the Concentrated Solar Power Sector
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FIGURE 57
Evolution of installed Concentrated Solar Power capacity in Spain (2007-2010)
FIGURE 58
Concentrated Solar Power capacity installed in 2010 and target of the PER 2005-2010
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Employment generated by the renewable energy sector

In 2010, the number of people employed directly by the Renewable Energy Sector was 54,925. This means that the number of jobs has fallen by 4,378 persons over the previous year, which is 7.4%.
If compared with the year 2008, the fall in the level of direct employment has been more than 20,000 (in 2009 employment was reduced mainly in photovoltaics), approximately 27.2% of the overall sector employment. The number of direct jobs stands at 2007 values. As mentioned throughout the document, the growth in the contribution to GDP, resulting from an increase in income from the sale of electricity and biofuels, has not been reflected in an increase in industrial activities of the main technologies. In this regard
FIGURE 59
Direct employment of the Renewable Energy Sector
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Employment generated by the renewable energy sector
FIGURE 60
Direct and induced employment of the Renewable Energy Sector
FIGURE 61
Breakdown for technologies of direct employment in the Renewable Energy Sector
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except for concentrated solar power, and technologies still in phase of development (small wind, geothermal and marine energy), all technologies have reduced the number of directly employed workers. The decline in industrial activities has also contributed a reduction in induced employment in other economic sectors. In this sense, when added direct and induced employment the total number of jobs associated with renewable energies in 2010 amounted to 111,455. It is important to note that the jobs generated in the construction of the concentrated
solar power plants are included as induced employment and that it has largey mitigated the reduction in the rest of technologies. For this reason, during 2010, the induced employment has been superior to the direct employment. Evaluated by technologies, it is observed that in wind, biomass, biofuels and solar PV have been lost in 2010: 4,972, 3,578, 1,175 and 995 jobs respectively. By contrast, the number of total jobs in concentrated solar power has increased by 5,244.
FIGURE 62
Breakdown for technologies of induced employment in the Renewable Energy Sector(12)
12 The update of this report includes as induced contribution to the GDP of the concentrated solar power sector the plants under construction during the years 2008, 2009 and 2010 that were not counted in previous editions, as part of the balance sheets of construction companies and not those belonging properly to the Renewable Energy Sector. In this regard, it has been modified the induced contribution to GDP both of this technology and of the whole of Renewable Energy Sector.
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Impact of renewable energies in the environment and in energy dependence

Impact in electricity production
In order to evaluate the effect of replacing conventional energy by renewable energies from an environmental and energy dependence point of view the methodology used in previous editions of this report has been replicated: For the period 2005-2010, the dispatch was done with the information of the demand in these years obtained from the Spanish Energy Regulator (Comisin Nacional de Energa). The mix of conventional energy used corresponds with that published by the Spanish Transmission System Operator (Red Elctrica de Espaa). In 2010, the renewable energy of the special regime replaced 60,012 GWh of electricity production with fossil fuels. For the years 2015 and 2020 the following objectives are considered for the generation of electricity from renewable energies set out in the draft of the PER 2011-2020 as well as the mix of fossil fuels established in
Step 1
Simulation of an electricity dispatch in which the production of electricity with renewable energies is not taken into account (conventional hydraulic energy was not replaced in this simulation) with the aim of quantifying the amount of fossil fuels that has been/would be replaced.
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FIGURE 63
GWh of fossil fuels replaced by the production of renewable energies (period 2005-2010)
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FIGURE 64
Electricity production (GWh) by renewable energies in 2015 and 2020
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the Additional Energy Efficiency Scenario of the same Plan.
Step 2
Quantification of the volume of avoided emissions of CO2 (or that would be avoided in 2015 and 2020) as a consequence of replacing fossil fuels.
The renewable energies (electricity production) have contributed to avoid 32,3 million tons of CO2 equivalent in 2010. In 2015 and 2020, as a consequence of the penetration of the renewable capacity foreseen in the draft of the PER 2011-2020, an annual saving of 43,8 million and 59,1 million tons of CO2 would be produced respectively.
FIGURE 65
Equivalent CO2 emissions avoided and to be avoided (2015 and 2020) by renewable energy production
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In accumulated terms, during the period 20052010 the equivalent of over 145 million tons of CO2 emissions were avoided. In economic terms, the impact of savings in CO2 emission rights would be very important: Considering a price of 14.47 (13) per ton of CO2, the saving was 467.2 million in 2010.
In accumulated terms for the period 20052010, the savings amounted to 2483.5 million (constant base 2010). Whereas in 2020, the estimated saving from considering a price per ton of CO2 of 28.66 (14), would be more than 1,693.2 million (constant base 2010).
FIGURE 66
CO2 emissions avoided (2005-2010): cumulative
13 Source: BLUENEXT - BNS EUA 08-12 (phase 2) - Bloomberg - PNXCSPT2 Index. 14 Source: International Energy Agency: World Energy Outlook 2010 - Price of CO2 emission rights in 2020 = 38 U.S. $ 2009, exchange rate 2010 (Bloomberg) 1 = 1.335 U.S. $.
81
Step 3
Calculation of the emissions of other polluting gases that are avoided by the generation of electricity with renewable technologies: NOx and SO2. Other gases harmful for humans are emitted during the process of burning fossil fuels, such
as SO2 and NOx. According to our analysis the avoided emissions of these gases would be(15): In the following sections of this document the impact that those gases have in human health according to independent evaluations from renowned investigation institutes is evaluated.
FIGURE 67
Evolution of NOx emissions avoided by renewable energy use
15 For the calculations the following sources have been consulted. - PCI for fuels: Inventory of the emissions of greenhouse gases in Spain years 1990-2002 made in 2004 (Government of Spain-Ministry of Environment ) and a Consultation to the Ministry of Environment (2005) - Emission factor of NOx: Swedish Environmental Protection Agency
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Step 4
Evaluation of the impact in terms of reduction of energy dependence derived from generating electricity with renewable sources.
The generation of electricity with renewable energy sources replaces the production with fossil fuels such as coal, oil and natural gas; this allows Spain to reduce its imports of these commodities significantly.
FIGURE 68
Evolution of SO2 emissions avoided by renewable energy use
83
According to the estimations: The generation of electricity with renewable energies avoided fossil fuel imports equivalent of 12.6 million tons of oil in 2010. For 2020 this figure will exceed 24.5 million toe.
In (real based for 2010), this translates into savings of 2,302.2 million (16) for the year 2010, approximately 0.22% of Spains GDP in 2010. The cumulative savings for the period 2005-2010 amounts to 11,168.3 million (constant base 2010).
FIGURE 69
Evolution of the substitution of fossil fuel imports (tons of oil equivalent)
16 Prices of fossil fuels: coal (70.13 / ton), Fuel ( 60.19 / barrel Brent), Natural Gas (5.23 / MMBtu).
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Environmental impact and of energy dependence of biofuels

In 2010, according to CORES, gasoline consumption reached 5.7 million tons while diesel fuel consumption was of 23.6 million tons. Meanwhile, the use of biofuels consisted of 0.4 million tonnes of bioethanol and 1.4 million tons of biodiesel. The use of biofuels in transport contributes significantly to reducing emissions of greenhouse gases. In 2010 emissions of more than 3.8 million tons of CO2 equivalent would have been avoided(17).
In addition to reducing the emission of greenhouse gases, the use of biofuels also produce other benefits like the substitution of oil imports for raw materials for the manufacturing and/or the import of biofuels. This has two positive aspects: Diversification of energy supply inputs. Reducing energy dependence of oilproducing countries characterized by political, social and economic instability. A higher penetration of biofuels in the market as well as increased domestic production of the same, would further contribute to reduce the external dependence and the negative effects that such instability has on the volatility of oil prices.
FIGURE 70
CO2 emissions avoided by the use of biofuels in transport
17 Methodology and Sources: Energy and greenhouse gas emission savings of biofuels in Spains transport fuel. The adoption of the EU policy on biofuels, CIEMAT; CORES.
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FIGURE 71
Estimation of the substitution of fossil fuels by biofuels in transport
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Evaluation of the risk derived from the lack of fossil fuels

One of the key objectives of energy policy is to reduce the energy dependence of Spain, because of the risk it poses for the proper functioning of the economy. The loss of a relevant volume of supply of one of the energy inputs during a certain period of time would have negative consequences for the economic activity.
Although the situation does not occur frequently, in the political and trade disputes which have been occurred so far should be an alarm signal to prompt the search for formulas which allow mitigating the risk derived from the scarceness of fossil fuels in Spain. In this context, a simulation was performed to quantify the negative impact on the Spanish economy. The simulation accounts for different scenarios of cuts in natural gas supply, which is the principal fossil fuel used for electricity generation in Spain.
FIGURE 72
Relation between Spains GDP and primary energy consumption
87
FIGURE 73
Simulation of the impact on Spains GDP if the main natural gas supplier cuts off its supply
Even though Spain imports the natural gas that it consumes from more than 10 different countries; however 32.1% of this amount came from just one country in 2010, approximately 131,850 GWh or more than 11 million toe. In the exercise carried out, the impact of a supply cut of 1, 10 and 20 days is simulated and estimated the number of days that would entail a loss of 1% of GDP. To do this, a calculation was made of the existent relationship between the GDP and consumption of primary energy of Spains economy. A 20 days cut on the supply from Spains main gas provider would amount to a loss of 5,000 million , approximately 0.5% of the GDP. The loss of supply of natural gas from this country for a period of 43 days would cause a reduction of 1% of Spains GDP. Although not very likely, the situation described hereinbefore can occur, since some of our natural gas and crude oil supply
countries are characterized by unstable sociopolitical situations. Additionally, technical problems related to the supply can also be a cause of a supply cut. The following facts should be taken into account: Spains energy dependence on primary energy of third countries reaches 74.0% when considering nuclear energy as a domestic energy source (methodology used by the Ministry of Industry, Tourism and Trade) and 88.6% if only considering renewable energies as such. In comparison to third countries, the energy intensity of the Spanish GDP is relatively high, about 0.12 toe per thousand euros. Spain imports almost all of their consumption of oil and natural gas from countries with particular geopolitical situations jeopardizing the security of supply of these fuels.
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FIGURE 74
Structure of Spains oil imports by countries
FIGURE 75
Structure of Spains natural gas imports by countries
89
Renewable energies incentives resulting from electricity generation

Comparing.the.results.of.the.savings.derived.from.avoiding. CO2. emissions. and. from. replacing. fossil. fuel. imports. the. remunerations. received. by. the. sector. as. an. incentive. for. its.development,.there.is.a.positive.balance.for.the.years.of. 2005-2008.and.a.negative.balance.for.2009.and.2010.
FIGURE 76
Comparison between the economic impact derived from avoided CO2 emissions and reduction in energy dependence, and of the incentives received by the Renewable Energy Sector(18)
18 Source: Comisin Nacional de Energa (National Energy Regulator)
91
Renewable energies incentives resulting from electricity generation
In 2010 the difference resulting from the gains generated by renewable energies (avoiding CO2 emissions and reducing the energy dependence) and the incentives received by the sector, was of 2,572.6 million , as a consequence of the strong increase obtained feed-in tariffs between 2008 and 2010. This increase was mainly due to the amounts paid to the concentrated solar power and to photovoltaic energy, the latter being
the energy that received the highest amount of remunerations in the past two years. The breakdown of the feed-in tariff obtained by the different technologies of the sector is shown in the following figure for the period 20052010. Additionally, the evolution of the contribution to the GDP was quantified for the different technologies receiving incentives.
FIGURE 77
Breakdown of incentives received by the different renewable technologies
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FIGURE 78
GDP contribution of renewable energies / amounts of incentives received
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Economic Impact in the wholesale electricity market derived from renewable energies belonging to the special regime
The renewable energies under the special regime reduce the cost of energy in the daily market of OMEL.
The existence of units of renewable generation from the special regime that act as price takers in the electricity wholesale market and whose marginal cost of generation cost is inferior to the units of fossil fuels, leads to a lower marginal price in the market than the one that would exist in the absence of such technologies. Renewable energies substitute units of conventional generation with a high marginal cost that would fix higher marginal prices in the market. Since the price of all the electricity is paid taking the price of the last MWh matched in the market (this is, the highest price), the availability of renewable energies, which offer the energy at zero price level, implies the fixing of lower marginal prices. Herein below we present an evaluation of the impact these effects have in the total cost of energy in the intraday OMELs Daily Market. Comparison of the hourly dispatch provided by OMEL on the daily market in which renewable energies are included (wind, photovoltaic, concentrated solar power and biomass) with one in which such technologies would have not been taken into account, for the period 2005-2010. The result obtained from this analysis is a reduction of the acquisition cost of energy derived from the lower marginal market price of electricity as a result of the existence of renewable energies. This amounted to a cheapening of 4847.6 million in 2010 (21.92 per MWh acquired in the market).
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Economic Impact in the wholesale electricity market derived from renewable energies belonging to the special regime
FIGURE 79
Methodology applied to compare the match schedule in the Daily Market with and without renewable energies(19)
19 This comparison has been made replacing the renewable energies taken into account in each timeframe by the following offers made by generation units in OMEL and the mechanism established in 2006 to avoid that the cost of CO2 emission allowances is transferred to all the energy negotiated in the market (minoracin de CO2). Being the daily market, it does not include the effect of the capacity guarantee nor of technical constraints.
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FIGURE 80
Cost savings in the OMEL Daily Market due to the penetration of renewable energies
FIGURE 81
Benefit derived from the penetration of renewable energies in the Daily Market: savings in the cost of energy in the wholesale market per MWh
97
The electricity tariff deficit and the saving provided by renewable energies in the Spanish electricity market
As.presented.in.the.previous.section,.there.is.a.lowering.in.the. cost.of.the.acquisition.of.energy.in.the.wholesale.market.arising. from. the. existence. of. renewable. energies.. In. this. section. of. the.report.this.saving.has.been.compared.with.the.equivalent. premium.that.the.promoters.of.these.facilities.receive.and.with. the.evolution.of.the.tariff.deficit..
Specifically, the following analyses have been carried out: Comparison between the annual tariff deficit / surplus and the net savings derived from renewable energies(20). Comparison between the evolution of the accumulated tariff deficit / surplus and the
20 Difference between the savings produced in the Daily Market of OMEL arising from the existence of renewable energies and the equivalent premium received by the agents of the special regime for renewable energies.
accumulated net savings since 2005 resulting from the penetration of renewable energies. In accumulated terms, in 2010 the tariffing deficit amounted to 24,582 billion of , whereas the net savings accumulated in the system derived from the existence of renewable energies during the period 2005-2010 was of 9,173 million of .
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The electricity tariff deficit and the saving provided by renewable energies in the Spanish electricity market
FIGURE 82
Annual tariff deficit(21) vs. net savings due to reduction of prices in the electrical market
21 Annual electric tariff deficit in million constant (base 2010). The source of the deficit data are the reports of the National Energy Regulator (Comisin Nacional de Energa, CNE) on the results of the interim evaluation and the verifications undertaken. These data are expressed in constant of 2010 using the GDP deflator published by the National Institute of Statistics.
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FIGURE 83
Accumulated tariff deficit vs. accumulated net savings due to reduction of prices in the electricity market
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10
The cost of electricity supply in Spain

The.impact.of.the.tariffs.and.premiums.received.by.renewable. energies. in. the. electricity. tariff. deficit. has. been. subject. of. strong. controversy. in. public.. In. order. to. assess. the. real. impact,.the.evolution.of.the.main.components.of.the.cost.of. electricity.in.Spain.in.recent.years.have.been.studied.according. to. information. published. by. the. National. Energy. Regulator. (Commission.Nacional.de.Energa,.CNE).and.the.results.of.the. Spanish.electricity.market.
From the study of the data contained in the tables above can be inferred:
3. Among the reasons explaining the modest

increase of the component of the payments made by the electricity generated are: A relatively low growth of demand in this period regarding the increase of installed power: 5.8% throughout the period, compared with an increase in installed capacity of 34.1% in the same period. Broken down by generation technologies, the installed capacity of combined cycle natural gas plants was the one that increased most during the period 2005-2010, 13,389 MW, followed by 10,275 MW of wind power capacity and other renewables (mainly solar photovoltaic and concentrated solar power), 4,517 MW.
1. The payments for the electricity generated,

being the sum of payments made to the ordinary regime and the special regime, grew during the period 2005-2010 at an annual average of 3.9%, a lower growth than the total costs for the supply of electricity, which grew by 4.6%.
2. The growth of the payments for the

electricity generated has been much lower than the price development of fossil fuels: a barrel of oil has increased by 42.6%, natural gas by 28.6% and imported coal by 52%, while the cost paid for electricity decreased by 4.4% in / MWh.
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FIGURE 84
Breakdown of the major energy costs (million of constant base 2010)(22)
22 Payments for electricity includes the following: Adjustments regarding income revision mainland and islands generation, adjustments regarding income - mainland and islands generation before 2003, adjustments regarding income - mainland and islands - January 2001 - December 2005, revision islands generation, additional cost-island generation (Article 18.1 RD 1747/2003), viability plan of Elcogas, SA, temporary adjustments regarding income of the deficit of income foreseen for 2009, incentive for the use of indigenous coal, system of interruptibility in the market, imputation of the difference of losses, deficit (+) or surplus (-) of system of capacity payments, settlement balance DT11, compensations DT11 RE, stock of coal, coal premium for coal according to Ministerial Order 21 / 11/2000, coal premium. Other specific costs / fees includes: CTC fee, nuclear moratorium (on the regulated incomes), fund for the financing of activities of the General Radioactive Waste Plan, fee for basic stock of uranium, fee for the 2nd part of the nuclear fuel cycle, costs of compensation for interruptibility and special regime, surcharge to recover the deficit of incomes generated in 2005. Costs associated to the deficit includes: Adjustments regarding income prior to 2003, 2006, 2007, 2008, 2009, 2010, awarders 2nd auction deficit ex-ante, temporary imbalances of income in the income deficit for 2009, settlement balance DT11, compensations DT11 RE. Other costs includes: Quality of service, demand side management, 2008-2012 Action Plan of the Strategy of Savings and Energy Efficiency in Spain, Strategy of Savings and Energy Efficiency in Spain 2004-2012. Sources: - Annual reports of the Spanish electricity system published by the Spanish Transmission System operator (TSO) (Red Elctrica de Espaa). - Statistical Information regarding Energy Sales in the Special Regime published by the Natioanl Energy Regulator (Comisin Nacional de Energa). - Rest of costs: Reports of the National Energy Regulator (Comisin Nacional de Energa) on the results of the provisional clearance and oractised verifications. - These data are expressed in constants of 2010 using the deflator of the GDP that publishes the National Institute of Statistics.
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FIGURE 85
Annual increase, increase over the period and average increase of the different costs
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Despite the growth of the amounts paid in premiums to renewables, these have a reducing effect on the electricity market prices. Renewable energies displace generation units with higher production costs, transmitting this effect to the entire energy matched in the market (not including the effect of the capacity guarantee nor technical constraints). In the analysed period, 2005-2010, in the years 2009 and 2010 the premiums were higher than the savings. In the rest of the fiscal years the premiums were inferior to the savings in the cost of acquisition of the energy in the Daily Market of OMEL due to the penetration of the renewable energies: that is, during the period 2005-2008 the premiums were compensated by the savings that were generated in the pool.
Additionally, payments for electricity generated in Spain have had smaller fluctuations than fossil fuel prices: a reduced dependence from these fuels means a relevant reduction of the volatility of the prices.
4. During the period 2005-2010, the relative

importance of the payments made by the electricity generated has declined in relative terms with respect to the total electricity supply costs in Spain: decreased from 71.2% in 2005 to 63.0% in 2010. Therefore during the period, the growth of the relative weight of the payments made for the generated electricity has been lower as the growth of the rest of the cost of the supply of electricity in Spain.
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FIGURE 86
Electricity production broken down between renewable energy of the special regime and other technologies (2005-2010)
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FIGURE 87
Comparison between the evolution of the price index of fossil fuels and the payments for the generated electricity
FIGURE 88
Cumulative growth of installed capacity vs. electricity demand
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FIGURE 89
Installed capacity of Coal, Combined Cycles (Natural Gas), Wind Power and Other Renewable Energies of the Special Regime. Source: Spanish Transmission System Operator (Red Elctrica de Espaa) and National Energy Regulator (Comisin Nacional de Energa)
FIGURE 90
Relative weight of energy costs compared to total system cost
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11
Comparison between the evolution of historical cost of adjustment services, capacity payments and losses in the system, and the level of penetration of renewable energy
Adjustment services(23)
Are those services necessary to ensure power supply in terms of quality, reliability and security. Adjustment services may be mandatory or optional. Adjustment services are understood to match the resolution of technical constraints, ancillary services and the management of deviations.
Capacity payment
Payment provided to support the service of power capacity in the medium and long term offered by the generation facilities to the electrical system.
23 Definitions: Red Elctrica de Espaa (The Spanish Electrical System in 2009)
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FIGURE 91
Evolution of the components of the average final price in the electricity market ( / MWh)
112
In the annual reports of the Spanish Transmission System Operator (Red Elctrica de Espaa) on the Spanish electrical system the costs committed for adjustment services
and for capacity payments are published. From this information a comparison has been carried out between the evolution of such costs and the development of renewable energy penetration.
FIGURE 92
Comparison between the evolution of electricity production from renewable energies and evolution of the percentage they represent with respect to the total cost, adjustment services and capacity payment. Source: Spanish Transmission System Operator (Red Elctrica de Espaa) and National Energy Regulator (Comisin Nacional de Energa)
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FIGURE 93
Evolution of the percentage adjustment services represent with respect to the total cost. Source: Spanish Transmission System Operator (Red Elctrica de Espaa)
FIGURE 94
Evolution of the percentage capacity payment represents with respect to the total cost. Source: Spanish Transmission System Operator (Red Elctrica de Espaa)
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From the comparison carried out it can be inferred that the cost resulting from adjustment services and capacity payment has not increased relevantly even though during the period 2004-2010 the volume of renewable energy in the system has doubled. On the other hand, it is important to note that during this period, with significant increases in renewable energy penetration, in some cases the percentage that these costs represent has come down whereas in other cases it has been increased.
Additionally, it contrasts the fact that the loss coefficients set(24) as a percentage of energy consumed for different levels of consumption have not been modified during the period 2004-2010, while the penetration of renewable energy (in terms of power generation) has increased more than 2.2 times.
FIGURE 95
Loss coefficients as a percentage of the energy and penetration of renewable energies in the system.
24 Loss factors to transfer the energy supplied to consumers
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12
Efforts of developers of renewable energy to connect their installations to the grid

The. process. of. getting. a. facility. for. the. generation. of. electricity. from. renewable. sources. operational. requires. a. series. of. investments. in. order. to. connect. this. facility. with. the. electricity. production. grid.. The. grid. connection. is. accomplished. through. a. series. of. infrastructures. which. allow. the. evacuation. of. the. produced. electricity. through. the.grid.and.which.additionally,.in.many.cases.contribute.to. improve.the.reliability.and.security.of.the.electricity.system. (strengthening.of.the.system,.meshing,....)..
These infrastructural improvements are paid for by the project developers of renewable energies, but those installations that form part of the grid system are passed over to the grid operator. In order to evaluate the economical impact of the efforts carried out by the renewable energy sector in these installations, the following has been done:
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Efforts of developers of renewable energy to connect their installations to the grid
The identification of a representative sample of the efforts taken by renewable energy project developers in the field of wind, photovoltaic, biomass and concentrated solar power for grid connections in the years from 2002 until 2010. Quantification of these efforts in economic terms: the ratio of these connections in terms of investment volume for the amount of connected capacity was obtained in per MW. These results were extrapolated to the entire capacity connected to the grid between 2002 and 2010. In this quantification wind, photovoltaic, biomass and concentrated solar power installations for the total volume of 6,654 MW were analyzed. According to the data of the Spanish Energy Regulator (Comisin
Nacional de Energa), the total volume of installed capacity for the revised period, between January 1st 2002 until December 31st 2010 has been of 21,000 MW, of which 16,141 MW was wind, 3,844 MW photovoltaic, 483 MW biomass, and 532 MW concentrated solar power. The sample used to calculate the total investment represented 33.9%, 29.0%, 15.8% and 18.8% of the total capacity installed in respectively wind, photovoltaic, biomass and concentrated solar power. As a result of these calculations, the following data were obtained with regard to the total investment in infrastructures per MW: The results were extrapolated to the entire installed capacity in the sample period, the resulting investment is shown below:
FIGURE 96
Investment cost / MW by technology
118
The results show that the wind energy sector has invested 63,238.0 /MW in infrastructures for grid connection. If this figure is extrapolated to the more than 16.1 GW of installed wind power capacity during the period between January 2002 and December 2010, the investment of the wind project developers would have been of 1,020.7 million . The amount contributed by market parties who invested in photovoltaic installations was of 108,637 /MW: the total amount for 3,844 MW of installed power thus was of 417.6 million . In the same line of significance the total investment of the biomass sector in grid
connections has been of 60,501 /MW: this means that the total of 483 MW that have been connected to the grid spent 29.2 million for connection costs. The quantities paid by the concentrated solar power sector sum to 69,561 /MW: calculated for the entire volume of 532 MW of installed power by the end of 2010, the investment has been of 37.0 million for grid connections. Subsequently, the total estimation of the amounts contributed by renewable energies project developers to connect their installations to the grid has been of 1,504.5 million (period 2002-2010).
FIGURE 97
Estimated investment in grid connection infrastructures
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13
Impact on human health

According. to. different. studies. carried. out. concerning. externalities. and. energy. policy(25),. based. on. estimations. of. emissions.from.large.electricity.plants.that.run.on.fossil.fuels. in. the. U.S.,. a. relationship. has. been. established. between. the. emissions.of.sulfur.dioxide.(SO2).and.nitrates.(NOx).and.loss. of.days.of.human.life.
Combining the previous data with the generation of energy with fossil fuels replaced by renewable energies, it is possible to obtain the impact on Spains population. According to the previous evaluation, in 2010 renewable energies would have been avoided the loss of 1,091,558 days of life. 182.681 days due to SO2 emissions avoided. 908.877 days due to NOx emissions avoided.
25 Source: Externalities and Energy Policy: The Life Cycle Analysis Approach (OECD, November 2001) 26 Source: Economic evaluation of the Environmental Impacts from Electricity Production (UAH, IDAE).
Additionally, analyses have been made evaluating the impact in health expenses derived from the emission of these gases(26). Departing from these studies and from the generation of energy that comes from fossil fuels that is replaced by renewable energies, the value in of the health expenditure avoided in Spain has been calculated: If combining the reduction of NOx and SO2 emissions in the year 2010 a health expenditure of nearly 160.5 million was avoided.
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Impact on human health
FIGURE 98
Days of life lost per GWh produced with coal, fuel oil and combined cycle (natural gas)
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FIGURE 99
Avoidable loss of days of life according to the assumptions used and the fossil fuel replaced (2005-2010)
FIGURE 100
Health expenditures not incurred (in the absence of NOx or SO2 emitted) due to the substitution of fossil fuels by renewable energies ()
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14
The energy policy objectives and renewable energies

Directive.2009/28/EC.of.the.European.Parliament.and.of.the. Council.of.23.April.2009.and.the.SET.Plan.(European.Strategic. Energy. Technology. Plan). mark. the. objectives. of. EU. energy. policy.and.set.the.targets.to.be.fulfilled.in.the.coming.years.
Directive 2009/28/EC
The overall objectives set by the Directive 2009/28/EC promote the use of renewables in energy generation establishing a goal of 20% from renewable energies in the case of gross final energy consumption in the European Union (EU) and 10% in the case of energy consumption in the transport sector by 2020. Each Member State has its own target set as a starting point taking its share of energy from renewable energies in gross final energy consumption in 2005. In particular for Spain this share is set at 20% for 2020. Below, the targets for the rest of the Member States of the European Union are shown:
125
FIGURE 101
Energy and Climate Change Package
126
FIGURE 102
National overall targets in gross final energy consumption in 2020
127
As can be observed, namely the target for Spain coincides with the European objective: in 2020 20% of final energy consumption has to come from renewables. The Directive also provides flexible mechanisms to achieve compliance with the objectives set: Statistical transfer: a Member State may buy production from another Member State (for statistical purposes) for compliance with the objectives. Joint projects: a Member State supports concrete projects of new renewable generation in another Member State (or a Non-EU-country if the energy is consumed in the EU territory). Joint support mechanisms: Several Member States may establish a common market of green certificates or a common regulated tariff for electricity from renewable sources. Today, Spain is world leader in some technologies in the field of renewable energies. Therefore it is an important source of business development which should be explored in the short to medium term.
The programs established by the SET-Plan to promote the development of key energy technologies at European level are large scale projects. One such plan is structured around the European Industrial Initiatives (EII) that bring together industry, the scientific community, Member States, the Commission and public-private partnerships. The SET-Plan identifies six key technologies which should advance technologically and are defined by the European Industrial Initiatives: Wind energy Bio-energy Solar energy CO2 capture and storage (CCS) Electricity grids Sustainable nuclear fission
The Renewable Energy Plan (PER 2005-2010) and the draft of the PER 2011-2020
End of 2010 was the deadline for achieving the targets set in the Renewable Energy Plan for the period 2005 to 2010. As can be observed in the following table, the objectives of primary energy consumption from renewable sources and consumption of biofuels have not been achieved. It is important to note that the situation reflected in the table below shows what happened in 2010, taking into account a hydropower production exceptionally superior to an average hydrological year. Considering mean values for the latter, the percentage of primary energy consumption supplied by renewable energies would fall to 10.4%, increasing the differential with the 12% target established in the Act of 27 November, of the electricity sector. Likewise, the percentage of renewable energies in gross electricity consumption would be 29.2%(27).
The SET Plan

The SET-Plan presents the future energy strategy defined by the European Union. The SET Plan aims to make clean energies (Low Carbon Technologies) a viable and competitive alternative. Given the general global scenario about climate change, the SET-Plan highlights the need to establish an effective policy regarding the reduction of emissions of greenhouse gases and improving energy efficiency. To carry out this ambitious challenge, the SET-Plan proposes a transformation in the whole energy system that implies profound changes both for the source, and the way energy is produced, transported, commercialised and used.
27
Source: Draft of PER 2011-2020. Average year normalized according to the methodology of Directive 2009/28/EC.
128
FIGURE 103
Degree of fulfillment of the renewable energy targets for 2010
129
In this sense, the targets for primary energy consumption supplied by renewable energies, the share of renewable energies in gross electricity consumption and consumption of biofuels have not been met. The only objective that has been fulfilled has been the one of tons of CO2 avoided.
As for the objectives set for each of the different power generation technologies, the situation at the end of 2010 is as follows: As shown in the table above, wind energy and hydropower have not reached the goals set by a relatively small margin compared to the
FIGURE 104
Evaluation of the degree of compliance with the objectives of installed capacity for 2010. Source: National Energy Regulator (Comisin Nacional de Energa, CNE).
130
FIGURE 105
Comparison of the targets set in the draft of the PER 2011-2020 with those established in the NREAP 2011-2020
installed capacity of biomass, which has been much lower than planned in the draft PER 2011-2020. The low level of biomass in Spain is mainly due to the difficulty of the sector to develop economically viable projects for the risks associated with this technology, for the availability of raw materials and price volatility, which has led to a very slow growth of this sector. The only technologies that have met the targets for 2010 are both photovoltaic and concentrated solar power. With the expiration of the PER 2005-2010, it was decided to develop a new Renewable Energy Plan with the time horizon 2011 to 2020. The new PER 2011-2020 by the Spanish Government sets new energy scenarios and incorporates objectives in accordance with Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources.
This plan reduces the technology targets defined by the Ministry of Industry, Tourism and Trade in the National Renewable Energy Action Plan (NREAP), submitted to the European Commission in 2010. Thus, as shown in the table above, in the draft of the PER 2011-2020 the targets for small hydro power, biomass and onshore wind have been increased, and the targets for other minority energies such as geothermal or tidal energy remain the same. Instead, the targets set for solar photovoltaic and concentrated solar power and in a very significant way for offshore wind energy have been reduced. Also, the overall target set in the new PER is 20.8% while in the NREAP a higher target of 22.7% was set. To achieve the targets of biomass, the new PER provides measures that focus on a
131
more efficient use of biomass as well as on a simplification of the procedures for the implementation of projects. The onshore wind technology is expected to remain relatively stable, with improvements in the resistance of the wind turbines, the quality of the transmitted energy to the grid and lower production costs. The objectives set for this technology are slightly above those established in the NREAP. In contrast, offshore wind targets have been reduced, giving special importance to the development of R & D for this technology in the draft of the PER 2011-2020 but setting a target not ambitious enough for 2020. Regarding the development of solar photovoltaic energy the PER expects an increase of this
technology in buildings, with a growth of installations of medium and small capacity. The plan also raises cost reduction measures in the production of energy with this technology as well as the removal of economic barriers for a better integration within the electrical system. As regards solar photovoltaic energy the PER also highlights the need to encourage R & D for the production of components and the development of storage systems as well as the hybridization with other technologies. In the last years it is found that the rate of growth of renewable energies in Spain in general has slowed down, evident partly in the reduction of the targets in the draft of the PER 2011-2020 compared to the previously established ones. The decrease in the growth of
132
renewable energies is mainly due to changes in the regulatory framework, which have generated uncertainty in the sector. Therefore, in order to achieve the objectives in energy policy it is indispensable to establish a stable regulatory and predictable framework, and which ensures the viability of investments. With respect to renewable energies in transport, the draft of the PER 2011-2020 also reduces the objectives previously defined in the NREAP, as shown in the table below.
Particularly striking is the significant reduction (-26%) introduced regarding the target set for biodiesel in 2020, while the goal of electricity from renewable energies in transport increases substantially (+43%). On the other hand, the objectives of bioethanol / bio-ETBE are maintained and those of other technologies whose contribution was marginal are eliminated. Overall, the draft of the PER 2011-2020 proposes to lower the target of renewable in transport from 13.6% as set in the NREAP to 11.3%.
FIGURE 106
Comparison of the targets in the transport sector (ktoe) set in the draft of the PER 2011-2020 with those established in the NREAP 2011-2020
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15
Conclusions
Relevance of the Renewable Energy Sector
The update of the Study of the Macroeconomic Impact of Renewable Energies in Spain for the year 2010 certifies the importance of this sector in our economy. The activities of the different subsectors have placed Spain as one of the references worldwide, and its effects are very important both economically and socially. This growth has made that many of the Spanish companies of the sector enjoy a leadership position internationally and our professionals are recognized for their high qualifications. Over the past five years, the contribution to the GDP of the Renewable Energy Sector experienced positive growth rates. In 2010, the total contribution of the Sector amounted to ten billion euros, 0.94% of Spains GDP. The development of the sector has been very important in all phases of the production chain: promotion of projects, manufacturing of equipment and components, provision of specific services, ... These activity levels allowed that during 2010 more than one hundred and eleven thousand direct and induced jobs, are attributable to the Renewable Energy Sector in our country. On the other hand, the industry is a reference in terms of technological development since the amount spent on R + D + i in relation to its contribution to GDP is much higher than the average of Spain. Significant results have also been achieved in respect of emissions of greenhouse gases avoided and fossil fuel imports replaced. It has been quantified that the cost savings accumulated for the period 2005-2010 derived from these effects was of 2,484 million and of 11.168 million respectively, expressed in constant terms (2010 basis).
135
Conclusions
The study also shows that the growth of payments made for the electricity generated have been below the average growth of the total costs related to the electricity supply and to the increase in fossil fuel prices. This has been the case for the following issues: A relatively low growth of demand in this period regarding to the increase in installed capacity. The effect of reducing the electricity market price of renewable energies by displacing generation units with a higher production cost, transmitting this effect to the entire energy matched in the market.
Evolution of the Sector in 2010

The year 2010 was a year with contradictory results. Although the contribution to GDP grew, this trend was due to increased revenues from energy sales and traders (not producers) of biofuels. By contrast, industrial activities experienced a reduction in their volume of activity, an effect that was common to the subsectors of wind energy, solar photovoltaic, biomass, small hydro and biofuels. The decrease in income levels of industrial activities deteriorated the competitive position
136
of international companies. While the figures for exports and foreign direct investment are still very relevant, this position of privilege could be seriously affected in the future if not reversed the trend in the Renewable Energy Sector in the last two years. In this context, the sector lost about five thousand jobs. The loss of these jobs are almost entirely produced in the activities of manufacturing equipment and components, and specific services. Among the causes that explain the changing trend in the Renewable Energy Sector are the following: The lack of a remuneration scheme for some technologies from 2013 onwards has added uncertainty regarding the development of projects. The definition of a stable and predictable framework which also ensures an adequate remuneration for investments is essential for the future of the sector. The existence of administrative barriers regarding the authorization procedures, certification and licensing severely impedes development of new facilities, as stated by Directive 2009/28/EC of the European Parliament and Council of April 23, 2009, on the promotion of the use of energy from renewable sources. In this sense, there are technologies in our country faced with these barriers being obstacles very difficult to overcome.
Restrictive trade practices of competition used by other countries in the case of biodiesel, which makes it impossible for domestic factories to be able to compete on equal opportunities. Looking to the future and concerning the fulfillment of the targets set in the draft of the PER 2011-2020, measures should be taken focused towards improving the competitiveness of domestic enterprises and an orderly growth of all phases of the value chain: The development of industrial approaches which include the promotion of facilities, equipment and component manufacturing, and the provision of specialized services, these approaches allow the development of economic activity throughout the value chain generating industrial knowledge and employment. The wind energy and photovoltaics at the time, were good examples of this in Spain. Increased access to international markets where agents are emerging with very competitive cost structures: given the level of technical excellence of our industry, it should specialize in those activities with higher added value, leaving those less relevant. For this it is crucial to make a significant effort in R + D + i.
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Index of figures
Figure 1. Direct, induced and total contribution to Spains GDP of the Renewable Energy Sector (2005-2010) ...................................................................................................6 Figure 2. Direct and induced employment of the Renewable Energy Sector...................................................7 Figure 3. CO2 emissions equivalent avoided by renewable energy production ..............................................8 Figure 4. Evolution of the substitution of fossil fuel imports (tons of oil equivalent) ..................................9 Figure 5. Comparison between the economic impact derived from avoided CO2 emissions and reduction in energy dependence, and of the feed-in tariffs received by the Renewable Energy Sector ........................................................................................................................9 Figure 6. Annual depreciation due to the penetration of renewable energies in the OMEL Daily Market .............................................................................................................................. 10 Figure 7. Comparison between the evolution of the price index of fossil fuels and the payments for the generated electricity ............................................................................................. 11 Figure 8. Cumulative growth of installed capacity vs. electricity demand ................................................... 11 Figure 9. Installed capacity of Coal, Combined Cycles (Natural Gas), Wind Power and Other Renewable Energies of the Special Regime. Source: Spanish Transmission System Operator (Red Elctrica de Espaa) and National Energy Regulator (Comisin Nacional de Energa) ................................................................. 13 Figure 10. Estimated investment in grid connection infrastructure (2002-2010) ...................................... 13 Figure 11. Installed capacity for electricity generation by technology of the special regime (MW) by the end of 2010. Source: National Energy Regulator (Comisin Nacional de Energa) ........................................................... 20 Figure 12. Penetration of biofuels in Spain in terms of energy content. Source: APPA .............................. 21 Figure 13. Direct contribution of the Renewable Energy Sector to Spains GDP (2005-2010) .................. 24 Figure 14. Growth rate of the Renewable Energy Sector in Spain (2005-2010) .......................................... 24 Figure 15. Relevance of the direct contribution to GDP of the Renewable Energy Sector with respect to GDP of Spain ............................................................................... 25 Figure 16. Direct contribution to GDP of the Renewable Energy Sector (2005-2010) - million of current ..................................................................................................... 26
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Figure 17. Direct contribution to GDP of the Renewable Energy Sector (2005-2010) - million of constant .................................................................................................... 27 Figure 18. Impact of the renewable energy sector in exports and imports, and net exports in the period 2006-2010 (million of constant base 2010) .............................................. 28 Figure 19. Comparison between annual growth rates of Spains GDP and the contributions to GDP of the Energy and Renewable Energy Sector ............................................... 29 Figure 20. Direct contribution to GDP of the different technologies (million of current ) ...................... 30 Figure 21. Growth rate of the different technologies in constant terms ...................................................... 30 Figure 22. Fiscal impact of the Renewable Energy Sector in Spain .............................................................. 32 Figure 23. Effort in R + D + i with respect to GDP ......................................................................................... 33 Figure 24. Direct, induced and total contribution to Spains GDP of the Renewable Energy Sector (2005-2010) ............................................................................................... 34 Figure 25. Relevance of the Renewable Energy Sector in terms of Spains GDP, period 2005-2010 .................................................................................................... 35 Figure 26. Percentage distribution of the contribution to Spains GDP segmented by the different renewable technologies (2010) .......................................................................... 36 Figure 27. Direct and induced contribution to GDP - breakdown by technologies ..................................... 37 Figure 28. Contribution to the GDP of the Biofuels Sector ........................................................................... 38 Figure 29. Growth rates of the Biofuels Sector in real terms ........................................................................ 39 Figure 30. Direct and induced contribution to GDP by type of biofuel ........................................................ 40 Figure 31. Level of penetration of biofuels in Spain ...................................................................................... 40 Figure 32. Percentage of utilization of production capacity of biodiesel plants in Spain ........................... 42 Figure 33. Contribution to the GDP of the Biomass Sector .......................................................................... 43 Figure 34. Growth rates of the Biomass Sector ............................................................................................. 44 Figure 35. Evolution of installed capacity and energy sold of the Biomass Sector ...................................... 45
139
Index of figures
Figure 36. Biomass target according to PER 2005-2010 and situation in 2010. Source: National Energy Regulator (Comisin Nacional de Energa) ........................................................... 46 Figure 37. Revision of the biomass targets in the draft of the PER 2011-2020 .......................................... 46 Figure 38. Contribution to the GDP of the Wind Energy Sector .................................................................. 48 Figure 39. Growth rates of the Wind Energy Sector ...................................................................................... 49 Figure 40. Fulfillment of the wind energy targets in the PER 2005-2010. Source: National Energy Regulator (Comisin Nacional de Energa) ........................................................... 49 Figure 41. Contribution to the GDP of the High Temperature Geothermal Energy Sector ........................ 51 Figure 42. Growth rates of the High Temperature Geothermal Energy Sector ........................................... 52 Figure 43. Contribution to the GDP of the Low Temperature Geothermal Energy Sector ......................... 53 Figure 44. Growth rates of the Low Temperature Geothermal Energy Sector ............................................. 54 Figure 45. Contribution to the GDP of the Marine Energy Sector ............................................................... 55 Figure 46. Growth rates of the Marine Energy Sector ................................................................................... 56 Figure 47. Contribution to the GDP of the Small Wind Energy Sector ....................................................... 59 Figure 48. Growth rates of the Small Wind Energy Sector ............................................................................ 60 Figure 49. Contribution to the GDP of the Small Hydro Sector .................................................................... 63 Figure 50. Growth rates of the Small Hydro Sector in real terms ................................................................. 64 Figure 51. Evolution of installed capacity and electricity generation of Small Hydropower (period 2005-2010) ..................................................................................................... 65 Figure 52. Level of penetration of Small Hydro for the generation of electricity in Spain (2010) and energy policy objectives established in the PER 2005-2010 ....................................... 65 Figure 53. Contribution to the GDP of the Solar Photovoltaic Energy Sector ............................................ 66 Figure 54. Growth rates of the Solar Photovoltaic Energy Sector in real terms .......................................... 67 Figure 55. Contribution to the GDP of the Concentrated Solar Power Sector ............................................. 69 Figure 56. Growth rates of the Concentrated Solar Power Sector ................................................................ 70 Figure 57. Evolution of installed Concentrated Solar Power capacity in Spain (2007-2010) ..................... 71
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Figure 58. Concentrated Solar Power installed in Spain in 2010 and target of the PER 2005-2010 ................................................................................................................... 71 Figure 59. Direct employment of the Renewable Energy Sector .................................................................. 73 Figure 60. Direct and induced employment of the Renewable Energy Sector ............................................ 74 Figure 61. Breakdown for technologies of direct employment in the Renewable Energy Sector ..................................................................................................................... 74 Figure 62. Breakdown for technologies of induced employment in the Renewable Energy Sector ..................................................................................................................... 75 Figure 63. GWh of fossil fuels replaced by the production of renewable energies (period 2005-2010) ..................................................................................................... 78 Figure 64. Electricity production (GWh) by renewable energies in 2015 and 2020 ................................... 79 Figure 65. Equivalent CO2 emissions avoided and to be avoided (2015 and 2020) by renewable energy production...................................................................................................................... 80 Figure 66. CO2 emissions avoided (2005-2010): cumulative ....................................................................... 81 Figure 67. Evolution of NOx emissions avoided by renewable energy use .................................................. 82 Figure 68. Evolution of SO2 emissions avoided by renewable energy use ................................................... 83 Figure 69. Evolution of the substitution of fossil fuel imports (tons of oil equivalent) ............................. 84 Figure 70. CO2 emissions avoided by the use of biofuels in transport ........................................................ 85 Figure 71. Estimation of the substitution of fossil fuels by biofuels in transport ...................................... 86 Figure 72. Relation between Spains GDP and primary energy consumption ............................................. 87 Figure 73. Simulation of the impact on Spains GDP if the main natural gas supplier cuts off its supply ........................................................................................ 88 Figure 74. Structure of Spains oil imports by countries ............................................................................... 89 Figure 75. Structure of Spains natural gas imports by countries ................................................................ 89 Figure 76. Comparison between the economic impact derived from avoided CO2 emissions and reduction in energy dependence, and of the incentives received by the Renewable Energy Sector .................................................................. 91 Figure 77. Breakdown of incentives received by the different renewable technologies .............................. 92
141
Index of figures
Figure 78. GDP contribution of renewable energies / amounts of incentives received .............................. 93 Figure 79. Methodology applied to compare the match schedule in the Daily Market with and without renewable energies ........................................................................... 96 Figure 80. Cost savings in the OMEL Daily Market due to the penetration of renewable energies ....................................................................................................... 97 Figure 81. Benefit derived from the penetration of renewable energies in the Daily Market: savings in the cost of energy in the wholesale market per MWh ............................... 97 Figure 82. Annual tariff deficit vs. net savings due to reduction of prices in the electrical market ............................................................................................. 100 Figure 83. Accumulated tariff deficit vs. accumulated net savings due to reduction of prices in the electricity market .................................................................................... 101 Figure 84. Breakdown of the major energy costs (million of constant base 2010) ................................ 104 Figure 85. Annual increase, increase over the period and average increase of the different costs .................................................................................................. 105 Figure 86. Electricity production broken down between renewable energy of the special regime and other technologies (2005-2010) ........................................................................ 107 Figure 87. Comparison between the evolution of the price index of fossil fuels and the payments for the generated electricity . .......................................................................................... 108 Figure 88. Cumulative growth of installed capacity vs. electricity demand .............................................. 108 Figure 89. Installed capacity of Coal, Combined Cycles (Natural Gas), Wind Power and Other Renewable Energies of the Special Regime. Source: Spanish Transmission System Operator (Red Elctrica de Espaa) and National Energy Regulator (Comisin Nacional de Energa) .............................................................. 109 Figure 90. Relative weight of energy costs compared to total system cost ................................................ 109 Figure 91. Evolution of the components of the average final price in the electricity market ( / MWh) .............................................................................................................. 112 Figure 92. Comparison between the evolution of electricity production from renewable energies and evolution of the percentage they represent with respect to the total cost, adjustment services and capacity payment. Source: Spanish Transmission System Operator (Red Elctrica de Espaa) and National Energy Regulator (Comisin Nacional de Energa) ............................................................... 113
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Figure 93. Evolution of the percentage adjustment services represent with respect to the total cost. Source: Spanish Transmission System Operator (Red Elctrica de Espaa) .............................................. 114 Figure 94. Evolution of the percentage capacity payment represents with respect to the total cost. Source: Spanish Transmission System Operator (Red Elctrica de Espaa) .............................................................................................................................. 114 Figure 95. Loss coefficients as a percentage of the energy and penetration of renewable energies in the system ................................................................................. 115 Figure 96. Investment cost / MW by technology ......................................................................................... 118 Figure 97. Estimated investment in grid connection infrastructures ........................................................ 119 Figure 98. Days of life lost per GWh produced with coal, fuel oil and combined cycle (natural gas) .................................................................................................................. 122 Figure 99. Avoidable loss of days of life according to the assumptions used and the fossil fuel replaced (2005-2010)....................................................................................................... 123 Figure 100. Health expenditures not incurred (in the absence of NOx or SO2 emitted) due to the substitution of fossil fuels by renewable energies () ................................................................ 123 Figure 101: Energy and Climate Change Package ........................................................................................ 126 Figure 102. National overall targets in gross final energy consumption in 2020 ..................................... 127 Figure 103. Degree of fulfillment of the renewable energy targets for 2010 ............................................. 129 Figure 104. Evaluation of the degree of compliance with the objectives of installed capacity for 2010. Source: National Energy Regulator (Comisin Nacional de Energa, CNE) ............................................... 130 Figure 105. Comparison of the targets set in the draft of the PER 2011-2020 with those established in the NREAP 2011-2020 ........................................................................................ 131 Figure 106. Comparison of targets in the transport sector (ktoe) set in the draft of the PER 2011-2020 with those established in the NREAP 2011-2020 ....................... 133
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Macroeconomic Impact of RES in Spain-2010

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Macroeconomic Impact of RES in Spain-2010

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Study of the Macroeconomic Impact of Renewable Energies in Spain

Study of the Macroeconomic Impact of Renewable Energies in Spain

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

Direct and induced employment of the Renewable Energies Sector

CO2 Emissions equivalent avoided by renewable energy production

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

Evolution of the substitution of fossil fuel imports (tons of oil equivalent)

1. The payments for the generated electricity,

3. The growth of demand in this period was

2. The growth in payments for generated

Source: Spanish Transmission System Operator (Red Elctrica de Espaa)

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

Cumulative growth of installed capacity vs. electricity demand.

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

Estimated investment in grid connection infrastructure (2002-2010)

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

Evaluation of other externalities

Economic and social

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

Penetration of renewable energies in Spain

Penetration of renewable energies in Spain

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

Penetration of biofuels in Spain in terms of energy content. Source: APPA

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

The Renewable Energy Sector: economic evaluation

The Renewable Energy Sector: economic evaluation

Direct Contribution of the Renewable Energy Sector to Spains GDP (2005-2010)

Growth rate of the Renewable Energy Sector in Spain (2005-2010)

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

The Renewable Energy Sector: economic evaluation

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

The Renewable Energy Sector: economic evaluation

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

The Renewable Energy Sector: economic evaluation

Direct contribution to GDP of the different technologies (million of current )

Growth rate of the different technologies in constant terms

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

The Renewable Energy Sector: economic evaluation

Fiscal impact of the Renewable Energy Sector in Spain

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

Efforts in R +D + i with respect to GDP

The Renewable Energy Sector: economic evaluation

Induced Impact on GDP

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

The Renewable Energy Sector: economic evaluation

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

Direct and induced contribution to GDP breakdown by technologies

The Renewable Energy Sector: economic evaluation

Economic Impact: biofuels

Contribution to the GDP of the Biofuels Sector

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

Growth rates of the Biofuels Sector in real terms

The Renewable Energy Sector: economic evaluation

Direct and induced contribution to GDP by type of biofuel

Level of penetration of biofuels in Spain

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010

The biodiesel case

The Renewable Energy Sector: economic evaluation

Percentage of utilization of production capacity of biodiesel plants in Spain

The bioethanol case

STUDY OF THE MACROECONOMIC IMPACT OF RENEWABLE ENERGIES IN SPAIN | YEAR 2010