Petrocalypse

Is a 100% renewable future possible?

Transitioning to a 100% renewable energy system is an ambitious and crucial goal in the fight against climate change. With its abundance of sun and wind, Spain has significant potential to achieve this goal. This analysis examines the technical and economic viability, for both electricity and thermal generation, of a system moving away from fossil fuels. We will review the history and current state of the energy system, critically assess the opportunities and challenges involved, and consider the difficulties that could prevent a complete transition, with reference to critical material shortages and technological limitations.

History and Current Status

Spain has come a long way in its energy transition. In the 1990s, the country’s energy mix relied heavily on non-renewable sources such as coal, oil and nuclear energy. However, since the 2000s, driven by favourable public policies and technological advances, Spain has begun to diversify its energy matrix towards more sustainable sources.

According to Red Eléctrica de España (REE), renewable energy accounted for only 20% of electricity generation in 2005. This percentage increased significantly with the introduction of the feed-in tariff for renewables and feed-in tariffs for wind and solar energy. By 2020, renewables will account for around 44% of electricity generation, with wind and solar PV as the main contributors.

In 2023, Spain’s installed renewable energy capacity reached new highs. Wind energy accounts for 28 GW of installed capacity and solar photovoltaic for 13 GW. Other renewable technologies such as solar thermal (2.3 GW) and biomass (1 GW) also make a significant contribution to the energy mix.

The Spanish government has set ambitious targets under the 2021 Climate Change and Energy Transition Law, including generating 74% of electricity from renewable sources by 2030 and achieving carbon neutrality by 2050. These targets are supported by the Energy Storage Strategy, which aims to achieve 20 GW of storage capacity by 2030, including batteries, green hydrogen and thermal storage.

Technical and Economic Viability

To achieve a 100% renewable electricity system, Spain will need a massive expansion of wind and solar technologies. The International Renewable Energy Agency (IRENA) projects that, to achieve this goal, Spain will need to increase its installed wind capacity to 50 GW and its installed solar photovoltaic capacity to 75 GW by 2050. These figures are based on demand growth projections and the need to replace conventional technologies.

Wind and solar have complementary generation characteristics. Wind produces more in winter and at night, while solar PV produces during daylight hours and is more effective in summer. This complementarity can reduce the need for storage and improve grid stability.

Renewable thermal generation is more challenging due to the current reliance on fossil fuels for heating and industrial processes. Technologies such as biomass, geothermal and heat pumps offer viable solutions. According to the Institute for Energy Diversification and Saving (IDAE), biomass could meet up to 30% of renewable thermal demand, while heat pumps and geothermal could provide a further 20%. Integrating these technologies will require significant investment in infrastructure and adaptation of existing systems.

The massive expansion of renewable technologies implies increased consumption of critical materials such as lithium, cobalt and rare earths, which are essential for batteries and other electronic components. The European Union has identified these materials as critical due to their limited supply and the concentration of production in a few countries. Diversification of sources, recycling and the development of alternative technologies are necessary strategies to mitigate these risks. We expand this section in our March blog, and in the interview with Guillermo Mínguez in the same month.

A World Bank report (2020) warns that demand for these materials could increase by 500% by 2050 due to the transition to clean energy. The criticality of these materials can limit the capacity for renewable energy expansion and must be managed with robust policies and strategies.

In addition, this transition to a fully renewable system will require significant cumulative investment. According to IRENA, the investment required by 2050 could reach 300 billion euros for Spain alone. This figure includes the installation of new generation capacity, the development of storage infrastructure, smart grids and energy efficiency improvements.

In terms of physical space, solar and wind require large areas of land and their implementation must be balanced with other land use needs. So-called agrovoltaics, or the use of livestock and wind farms, are needed to reduce the need for land-use change. The integration of renewable technologies into buildings and urban areas, such as solar roofs and micro-grids on industrial sites, can help optimise the use of available space.

Implementation of Self-consumption and micro-grids

Residential and industrial self-consumption is crucial in the energy transition. According to IDAE, self-consumption is expected to grow exponentially, reaching up to 15 GW of installed capacity by 2030. Microgrids on industrial sites can improve the resilience and efficiency of the electricity system, allowing greater local control of energy generation and consumption. These decentralised solutions not only increase energy security, but also reduce dependence on the national grid and enable greater integration of renewable energy. A study by the Polytechnic University of Madrid (2021) estimates that the implementation of microgrids could reduce transmission and distribution losses by 10%, improving the overall efficiency of the electricity system.

The Role of Hydrogen

Green hydrogen, produced from renewable sources, is a promising solution for sectors that are difficult to electrify, such as heavy transport and certain industries. Spain’s National Hydrogen Plan, presented in 2020, foresees the installation of 4 GW of electrolysis capacity by 2030. Integrating hydrogen into the energy mix can provide seasonal storage and flexibility, complementing other renewable sources.

According to the Hydrogen Council, hydrogen could meet up to 18% of global energy demand by 2050, highlighting its potential in the energy transition. Green hydrogen can also be used to produce ammonia and methanol, essential products for the chemical and fertiliser industries.

Challenges and Chances of Not Meeting the Target

Shortage of Materials and Technologies

Antonio Turiel, in his analysis of the energy transition, highlights the scarcity of critical materials as a significant obstacle. The dependence on materials such as lithium, cobalt and rare earths for the manufacture of batteries and other electronic components is a considerable constraint. In addition, the geographical concentration of production of these materials increases the vulnerability of supply.

Technological Limitations

The intermittent nature of renewable energy sources such as solar and wind requires advanced energy storage and management solutions. Current storage capacity through batteries and other technologies is insufficient to ensure continuous and reliable supply. In addition, the development of power and control technologies, such as SCADA systems, is critical to the efficient integration of renewable energy into the grid.

Large-scale storage, such as lithium-ion batteries and pumped storage, presents technical and economic challenges. According to a report by the Fraunhofer Institute (2022), at least 40GWh of storage capacity would be needed to ensure the stability of the Spanish electricity system in a 100% renewable scenario.

Investment and Timeframes

The investment required for the energy transition is considerable. Moreover, the timelines for achieving the goals of a 100% renewable energy system are ambitious. According to the International Energy Agency (IEA), investment in renewable energy must triple over the next decade to meet global climate targets. In Spain, the implementation of renewable energy projects faces regulatory, bureaucratic and social acceptance challenges that can significantly delay timelines.

Physical Space

The availability of space for renewable installations is also a challenge. Solar and wind power plants require large areas, and their implementation must be compatible with other land use needs, such as agriculture and biodiversity conservation. Competition for land use may limit the expansion of these technologies.

A study by the Institute for Energy Diversification and Saving (IDAE, 2021) shows that to install 75 GW of solar PV, approximately 150,000 hectares would be needed, which represents significant challenges in terms of planning and land use.

Conclusion

The possibility of a 100% renewable future is possible, but to reach this total independence and due to our dependence on current fossil fuels, we face a number of technical and infrastructure development challenges and major changes in current paradigms (current consumption and efficiency, off-grid vs conventional grid, implementation of continuous technological improvements).

There is no single solution, only the coordinated synergy of different technologies for generation, storage, exploration and operation of energy vectors such as H2, and most importantly, a conviction as a society that will allow us to reach a NET ZERO future, going from a decrease in our consumption, to an improvement in energy consumption processes through efficiency, and a greater increase in decentralisation strategies such as shared self-consumption or energy communities. In short, the mantra is: think global, act local.