Spain 2021 - .NET Framework

1 Energy Policy ReviewSpain 2021 The IEA examines the full spectrum of energy issues including oil, gas and coal supply and demand, renewable energy technologies, electricity markets, energy efficiency, access to energy, demand side management and much more. Through its work, the IEA advocates policies that will enhance the reliability, affordability and sustainability of energy in its 30 member countries, 8 association countries and note that this publication is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at publication and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or : IEA. All rights Energy Agency Website: member countries: Australia Austria BelgiumCanadaCzech Republic DenmarkEstoniaFinland France Germany Greece HungaryIreland ItalyJapanKorea Luxembourg Mexico Netherlands New Zealand NorwayPoland Portugal Slovak Republic Spain Sweden Switzerland Turkey United Kingdom United StatesThe European Commission also participates in the work of the IEAIEA association countries:BrazilChinaIndiaIndonesiaMoroc coSingaporeSouth AfricaThailandINTERNATIONAL ENERGYAGENCY 3 FOREWORD Foreword The International Energy Agency (IEA) has conducted in-depth peer reviews of its member countries energy policies since 1976.

2 This process supports energy policy development and encourages the exchange of and learning from international best practices. By seeing what has worked or not in the real world , these reviews help to identify policies that deliver concrete results. Since 2017, the IEA has modernised the reviews by focusing on the key challenges in today s rapidly changing energy markets. Spain has shown important leadership on clean energy transitions, including through support for key IEA initiatives. I am especially grateful to Teresa Ribera Fourth Vice President of the Spanish Government and Minister for the Ecological Transition and the Demographic Challenge for her longstanding dedication to action on climate change and ensuring fair and equitable energy transitions. She has played an invaluable role in the Global Commission for Urgent Action on Energy Efficiency and the Global Commission on People-Centred Clean Energy Transitions, two high-level groups of leading international figures that I convened in recent years to bring greater attention and policy action in these critical areas.

3 Since the last IEA review in 2015, Spain has solved a long-standing problem of electricity and gas tariffs not covering costs, and has closed all of its coal mines, allowing it to prioritise the energy transition in its policy agenda. Spain has emphasised the concept of a just transition by ensuring that communities in traditional energy sectors, notably coal mining, are not left behind. The Spanish Framework for energy and climate is based on a 2050 objective of national climate neutrality and 97% renewable energy in the total energy mix. As such, it is centred on the massive development of renewable energy, energy efficiency, electrification and renewable hydrogen. Notwithstanding its considerable progress to date on decarbonising and increasing the share of renewables in the electricity sector, Spain s total energy mix is still heavily dominated by fossil fuels.

4 The transport, industry and buildings sectors all have considerable work ahead of them to meet the country s targets for increasing the share of renewables and reducing emissions. When all of Spain s plans and strategies are implemented, a completely different energy sector will emerge, where fossil fuels are no longer dominant and end-user sectors are mostly electrified. Such a transformation will bring new challenges in the form of energy security, as fluctuating renewable generation will require new forms of back-up and flexibility. The changes will also bring opportunities, particularly in areas such as energy system integration. Importantly, Spain s plans to recover from the COVID-19-induced economic crisis present a major opportunity to frontload its planned investments in its clean energy transition over the upcoming three years.

5 I sincerely hope that the recommendations proposed in this report will help Spain navigate its energy system transformation as it seeks to build momentum towards achieving climate neutrality and a renewables-based energy system by 2050. Dr. Fatih Birol Executive Director International Energy AgencyAll rights reserved. TABLE OF CONTENTS 5 TABLE OF CONTENTS ENERGY INSIGHTS 1. Executive summary ..11 Overview ..11 Climate change Energy efficiency ..13 Electricity transition ..13 Energy system transformation ..14 Energy security ..14 Key recommendations ..15 2. General energy policy ..17 Country overview ..17 Supply and demand ..19 Institutions ..23 General energy policy overview ..25 Energy security ..30 Pricing and taxation ..31 Assessment ..32 Recommendations ..37 ENERGY SYSTEM TRANSFORMATION 3. Energy and climate change ..39 Overview ..39 Energy-related CO2 emissions ..40 Carbon intensity.

6 42 Institutional responsibilities ..43 Emission targets and strategy ..44 Adaptation to climate change ..49 Assessment ..50 Recommendations ..52 4. Energy efficiency ..55 Energy intensity ..55 Energy consumption by sector ..57 Institutional responsibilities ..61 All rights reserved. TABLE OF CONTENTS 6 Energy efficiency targets and strategies ..61 Assessment ..72 Recommendations ..75 5. Renewable energy ..77 Renewable energy in total final energy consumption ..77 Renewable energy in electricity ..80 Institutional responsibilities ..81 Renewable energy policy ..82 Assessment ..91 Recommendations ..93 6. Energy research, development and innovation ..95 Overview ..95 Energy innovation priorities and guiding documents ..97 Key actors in Spain s energy innovation ecosystem ..99 Resource push .. 100 Knowledge management .. 103 Market pull .. 104 Socio-political support .. 105 Assessment .. 107 Recommendations.

7 108 ENERGY SECURITY 7. 111 Overview .. 111 Electricity supply and demand .. 112 Electricity market structure .. 114 Trade and interconnections .. 119 Electricity prices .. 121 Electricity market regulation .. 123 Electricity market policies .. 126 Electricity security .. 131 Assessment .. 134 Recommendations .. 137 8. Nuclear .. 139 Overview .. 139 All rights reserved. TABLE OF CONTENTS 7 TABLE OF CONTENTS Nuclear policy .. 140 Nuclear power plant operation .. 142 Nuclear fuel supply .. 144 Decommissioning and radioactive waste management .. 144 Research and development .. 149 Assessment .. 149 Recommendations .. 151 9. Coal .. 153 Overview .. 153 Supply and demand .. 154 Coal policy .. 156 Assessment .. 158 Recommendation .. 159 10. Natural gas .. 161 Overview .. 161 Supply and demand .. 162 Gas prices .. 164 Institutions .. 166 Natural gas industry structure .. 167 Natural gas regulation.

8 168 Natural gas market operation .. 170 Natural gas policy .. 172 Natural gas infrastructure .. 174 Natural gas security of supply .. 177 Assessment .. 180 Recommendations .. 182 11. Oil .. 185 Overview .. 185 Supply and demand .. 186 Oil market structure .. 190 Oil market policies .. 190 Prices and taxation .. 192 Oil infrastructure .. 194 Oil emergency policies and organisation .. 196 Emergency oil stocks .. 198 Assessment .. 199 Recommendations .. 201 All rights reserved. TABLE OF CONTENTS 8 ANNEXES ANNEX A: Organisations visited .. 203 ANNEX B: Energy balances and key statistical data .. 206 ANNEX C: International Energy Agency s Shared Goals .. 210 ANNEX D: Glossary and list of abbreviations .. 212 LIST OF FIGURES, TABLES AND BOXES Figures Figure Map of Spain ..19 Figure Overview of Spain s energy system by fuel and sector, Figure Spain s total energy supply by source, 2000-19.

9 21 Figure Spain s energy production by source, 2000-19 ..21 Figure Spain s production/total energy supply by energy source, 2000-19 ..22 Figure Spain s total final consumption by sector, 2000-19 ..22 Figure Spain s total final consumption by source and sector, 2019 ..23 Figure Greenhouse gas emissions in Spain by sector, 1990-2018 ..40 Figure Energy-related CO2 emissions in Spain by sector, 2000-19 ..41 Figure Energy-related CO2 emissions in Spain by energy source, 2000-19 ..41 Figure Energy-related CO2 emissions and key drivers in Spain , 2000-19 ..42 Figure CO2 intensity in Spain and selected IEA member countries, 2000-19 ..43 Figure CO2 intensity of electricity and heat generation in Spain and selected IEA member countries, 2000-19 ..43 Figure Energy consumption and drivers in Spain , 2000-19 ..56 Figure Energy intensity in select IEA member countries, Figure Energy consumption in Spain by sector, 2000-19.

10 57 Figure Energy consumption in transport in Spain by fuel, 2000-19 ..58 Figure Energy consumption in industry in Spain by fuel type, 2000-19 ..58 Figure Energy consumption in the residential sector in Spain by fuel, 2000-19 ..59 Figure Breakdown of energy consumption in the residential sector in Spain by use, Figure Energy consumption in the services sector in Spain by fuel, Figure Spain s cumulative final energy savings projected for 2021-30 ..62 Figure Renewable energy in total final energy consumption in Spain , 2019 ..78 Figure Renewable energy in total final energy consumption in Spain , 2000-19 ..79 Figure Renewable energy as share of total final energy consumption in IEA countries, 2018 ..79 Figure Renewable energy in electricity generation in Spain , 2000-19 ..81 Figure Renewable energy as a share of total electricity generatio in IEA countries, 2019.