The drought, a rigorous summer of high temperatures, the virtual disappearance of coal and the so-called Iberian exception have led combined cycle plants to position themselves in 2022 as the first electricity production technology. More than a decade later, natural gas has regained leadership in the electricity system, representing almost 25% of the mix of generation, above 69,000 GWh, according to Red Eléctrica estimates. In this way, the gas has been located ahead of wind power (the star of recent years), with a share of 22.1%, and nuclear, with another 20.2%.
Gone are the years when fifty combined cycle power plants languished. In 2015, up to 13 gas plants operated zero hours and almost as many worked only one day throughout the year, according to the data recorded that year by the CNMC and the system operator, REE. Gas plants, which were still competing with coal-fired power plants, then a cheaper and more polluting fuel, were able to survive thanks to the capacity payments they received for being available. That crisis led to the large electricity companies (Naturgy, Iberdrola and Endesa) to request the regulators, the then Ministry of Energy and the CNMC and Red Eléctrica to close the most dilapidated facilities. Even the system operator considered 6,000 MW left over.
Except for some isolated cases, the Spanish gas park has continued to operate all this time and has inadvertently encountered a very favorable year. For some, what happened in 2022 shows that “gas is still necessary and key to supporting the system and guarantee supply at times of low renewable production due to lack of wind, water and sun”, according to sources in the sector. For others, it is a conjunctural situation It will hardly be repeated: the year that is now ending has been an exceptional year in which beneficial factors for the cycles have come together and which has been marked by the effects of the Russian invasion of Ukraine. The reduction (and almost disappearance) of the Russian supply has shot up gas prices to exceed 300 euros/MWh last August, compared to 16 euros/MWh in January 2021.
The consequences of extreme heat and drought year account for the decline in hydraulic production by 40% this year, as well as the stagnation of wind energy production (barely 1% more than last year) due to the persistent anticyclone last summer, with an average temperature of three degrees above the previous year. Although photovoltaic energy has skyrocketed by 33%, according to the latest REE data, this technology it still only represents 10% of the mix. The sum of solar photovoltaic and wind energy would surpass gas, with 42%.
More than 61%
Although the demand for conventional gas (that of households and industry) It has collapsed between January and November by 20% due to the crisis and the energy saving measures, the one destined to electricity production has climbed above 61%, according to Enagás statistics. With an installed capacity of 26,250 MW, the combined cycles have registered an availability rate of 86%.
These have played with the advantage of the gap left by another firm technology, that of coal, whose disappearance does not seem to have two ways. The increase in the cost of CO2 emission rights has given it the finishing touch: of an installed power of almost 11,000 MW in 2015demand last year had been reduced to 3,700 MW. Its production between that year and 2022 has gone from 52,600 GWh to 7,700 GWh. At the moment and for reasons of security of supply, two EDP plants and one of Endesa’s As Pontes groups are barely working.
Another of the reasons for the success of gas generation has been the subsidy provided by the Iberian exceptionwith which Spain and Portugal have eliminated the extraordinary income from nuclear, water and some renewables derived from high gas prices, which, although it charges its cost, has ceased to mark the marginal price for those.
Sources in the sector consider that with this system, “not all energy is being valued at a scarcity price, so the consumer does not receive the scarcity signal.” And they add that the price of gas “has been artificially lowered, there is not one for everyone, but only for those who can pay it.”
The more gas, the more CO2 emissions
Cost. The revival of electricity production with natural gas, largely due to high temperatures and drought, can be considered double bad news: on the one hand, because it has coincided with an unprecedented rise in the prices of this hydrocarbon due to the effects of the war in Ukraine, and the increase in CO2 emissions that it has entailed, up to 44 million tons.
Temperature. The extreme summer caused an increase in consumption due to the use of air conditioners and with it, the demand for electricity in a few months of low wind production. With the rains and storms this fall, the system has benefited from increased hydraulic and wind production and a reduced need for gas. Not surprisingly, thanks to renewables, these days the lowest pool prices are being recorded since 2021. Prices already forgotten, such as the one that the electricity pool set on Sunday: 10.63 euros/MWh.
Solar. Experts insist that the 25% share achieved by gas this year is something extraordinary. And it is that just around the corner, the 100,000 MW of photovoltaic solar that are in project or under construction will come into operation. With them, the price during daylight hours “will collapse”, predict the same sources.
