The Spain power market is expected to grow at a CAGR of around 5.5% during the forecast period. With the COVID-19 outbreak in Q1 of 2020, Spain’s power industry witnessed a negative impact. In 2020, the country’s electricity sector experience dropped in demand by more than 7% compared to 2019. The drop in demand was majorly due to the restriction imposed, leading to lower electricity required in various commercial and industrial places. Factors such as the growing demand for electricity due to industries and population are expected to drive the market. However, increasing electricity price, which is comparatively high as compared to other European countries, is expected to hinder the market growth during the forecast period.
- On account of dominating market share in 2020, the renewable power sector is expected to act as a significant segment during the forecast period.
- With increasing demand and growing concern towards renewable energy, Spain is likely to increase the installed capacity of renewable energy from 59 GW to 120 GW by 2030. Such a scenario is likely to create opportunity for the power generation companies to install more renewable energy projects, thus supporting the power sector to grow during the upcoming years.
- Declining installation cost of renewable technology like solar and wind is expected to drive the market.
Key Market Trends
Renewable Expected to be a Significant Sector
- Renewable is the largest sector in Spain’s power industry. As of 2020, the renewable sector generates nearly 31% of the total electricity. Among the renewable technologies, wind and hydroelectric are the dominant sector.
- Further, during the last ten years, the solar energy sector grew significantly, and is expected to witness further growth with declining solar energy installation costs during the study period.
- As per the 2020 new regulation for renewable energy, 90% of wind turbines, 60% of PV projects, or 80% of the solar thermal projects are likely to be produced domestically. Such a situation would help the country to cut down the component prices in the country.
- The country has set a framework for energy and climate. By 2050, the country has a target of having 100% renewable electricity, and 97% renewable energy in its energy fix. Hence, such a scenario is likely to boost the sector with the installation and commissioning of new renewable energy projects throughout the study period.
- Among various upcoming projects, Solaria seven solar energy projects in Castilla y Leàƒ³n, Castilla-La Mancha and Extremadura are few prominent projects, which are expected to have a total capacity of around 261 MW.
- Hence, owing to the above points, the renewable segment is likely to act as a significant sector during the forecast period.
Declining Installation Cost of Renewable Technology
- The solar industry has cut costs dramatically in the past eight years through economies of scale. As the market was flooded with equipment, prices plummeted. The cost of solar panels is dropped by around 61% in 2020, as compared to 2013.
- During the last eight years, solar PV installation has reduced by more than half of the price in 2013. In 2013, the installation cost for residential solar PV was around USD 2903 per kW, and in 2020 it slashes down to USD 1397 per kW.
- Additionally, for commercial solar PV connection, the installation cost is reduced further. From USD 3559 per kW in 2013, it decreased to USD 849 per kW in 2020.
- Moreover, the cost of onshore wind energy projects has been reduced. From USD 3500 per kW in 1990 to USD 1100 per kW in 2020, the installation cost was reduced by nearly -5.6%.
- Hence, considering all the above scenarios, renewable technology is expected to grow further, leading to the overall power sector growth during the study period.
Competitive Landscape
The Spain power market is moderately consolidated. The key players in the market include Endesa S.A, Iberdrola SA, Naturgy Energy Group S.A., Total Energies SE, Nordex SE, and EDP Group among others.
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Table of Contents
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Endesa S.A
- Iberdrola SA
- Naturgy Energy Group S.A
- Total Energies SE
- Nordex SE
- EDP Group
- Grupo Red Electrica
- ABO Wind AG
Methodology
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