Spain will not be 100% renewable in 2050

Spain will not be 100% renewable in 2050, but almost. According to the Long-Term Decarbonization Strategy, which the Government has just released to the public, the energy system will be 97% clean, and all CO emissions₂ of the country – which will be at 10% of the 1990 level – will be compensated by the reforestation of 20,000 hectares per year and other measures. The Executive estimates that it will take around 500,000 million to achieve it

Complying with the commitments made by the EU with the ratification of the Paris Agreement, the Ministry for the Ecological Transition (Miteco) has released to public information the plan for Spain to emit less _CO2 than it will be able to absorb in 2050. It means going from 334 million tons of carbon last year to about 29 million tons, with a absorption capacity of 37 million tons.

The Strategy hopes to achieve this through renewable electricity production, sustainable building, agriculture and transport, and carbon sinks in forests and wetlands, which will absorb the carbon emitted by activities that are impossible to decarbonise, such as heavy industry.

The Strategy aims to invest 500,000 million euros until 2050 so that the country meets the objective of being neutral in _CO2 emissions. On the trend scenario, at the end of the period GDP would increase by 2% and create up to 350,000 jobs -1.6% more-, save 344,000 million in imports -they would go from 73% to 13%- and reduce the mortality associated with air pollution by 64% compared to 2010.

For this, it has the guidelines of the EU and Spain, which foresee allocating 30% of the annual budgets to actions that support the fulfillment of climate objectives, starting with the next six-year term, from 2021 to 2027, which includes the aid package of 750,000 million, also focused on sustainable investments.

Open for public consultation until September 30, it is an extension of the current Integrated National Energy and Climate Plan (PNIEC), which foresees the investment of 240,000 million until 2030 to reduce current _CO2 emissions by a third. From there, it calculates that an additional 300 billion will be needed in addition to the trend scenario to meet the targets, around 1% of annual GDP, in line with EU calculations.

The energy system, fundamental

The key lies in the energy system, which is responsible for two-thirds of emissions. It proposes a 100% renewable electricity sector before reaching the middle of the century, doubling electricity consumption from the current 26% to 52% in 2050; electricity will cover 86% of household demand and 91% of services.

In the case of transport, the penetration of renewables will not be total, nor will it be fully electrified. The energy needs of mobility will be covered by 79% of electricity and other renewable fuels, such as biofuels or green hydrogen, while the remaining 21% will remain of fossil origin.

Imports of oil, gas and coal should be reduced from 2.8% of GDP in 2031 to 0.42% of GDP in 2050, some 7.6 billion euros. In total, 97% of the energy system should be renewable by mid-century.

In construction it foresees a massive rehabilitation, since 80% of the current park will still stand and with use by the middle of the century… In agriculture, more rotations in rainfed arable crops, the optimization of nitrogen supply, the improvement of manure treatment, the reduction of waste in the food chain. In waste, a lot of Circular Economy… In carbon sinks, restoring 50,000 hectares of wetlands and three million hectares of forest, in addition to planting 20,000 hectares a year…

“Spain can occupy a leading position in the economic segments linked to the ecological transition. We have an important volume of renewable resources, hours of sun, wind, large natural spaces, which are complemented by a business, technological and innovation fabric that has been the protagonist in the international deployment of renewable energies in the last two decades, “says the head of Miteco, Teresa Ribera.

On the scenario chosen to make the calculations, GDP should grow by 1.32% per year from 2021 to 2050, with an increase in population of 5.8%. In relation to energy costs, those used by the European Commission are considered – the barrel of crude oil amounts to 90 euros in 2025 and almost 120 euros in 2050 – and the CO emission right₂ reaches €50 per tonne in 2040 and €90 per tonne in 2050.

Cost overruns of 3,700 million

The Strategy also calculates the increased costs of mitigating emissions from certain “hard” sectors, which are very difficult or impossible to decarbonise with current technologies, including steel, heavy and maritime transport and aviation.

The document defends the application of protective measures for the industry – such as the carbon tariff foreseen by the EU or other border adjustments – in order not to reduce its competitiveness. However, it recognizes that mitigation will increase its production costs and that these cost overruns will be transferred to product prices, causing the loss of purchasing power of consumers and a negative impact on the economy.

The cost overruns, on the trend scenario, range from 600 million in 2031 to 3,700 million in 2050, from 0.04% to 0.2% of GDP respectively. This increase in the final phase of the period is due to the fact that its emissions will be the most expensive to avoid, although in the macroeconomic picture it has a very small effect.

Source: The Economist