Renewable energies are not limited to supplying energy with low emissions, but are accompanied by a series of benefits in broader terms. They are capable of driving greener economic growth and are a key pillar in achieving the Sustainable Development Goals. In the case of Spain, for example, the benefits in terms of water savings may be especially relevant, as wind does not need the cooling required by thermal power plants (satisfied from rivers and other water bodies). Thus, wind would save about 140 million m3 in 2030.
This is one of the main messages emerging from the recent report The socio-economic impact of wind energy in the context of energy transition, prepared by KPMG at the request of Siemens Gamesa.
According to Spain’s Draft Integrated National Energy and Climate Plan (PNIEC), renewables would account for 74% of the electricity mix in 2030, with wind power accounting for 34%, bringing Spain closer to the ambitious targets for renewables and emissions set out in the Plan. Such a renewable electricity mix would be sustained thanks to the existing complementarity between wind and solar power, which should not be seen as competitors but as allies. Together with hydroelectric power, these technologies will bring greater security of supply, less price volatility and greater diversification of actors and technologies in the sector, all thanks to the excellent work of integration and operation of the system that is done in our country.
This increase in renewables in Spain will come hand in hand with greater investment in the sector, which would account for 43% of the total funds earmarked for energy transition in Spain until 2030 and which would mostly come from the private sector, according to PNIEC’s own estimates. If regulatory stability goes hand in hand, this could be achieved because, thanks to significant cost reductions, favourable market prospects and a low interest rate environment, national and international private investors (energy companies, industrial players but also financial players such as pension funds, infrastructure) see Spanish renewables as a very attractive sector, as we see every day in our offices.
The economic activity associated with this investment in renewables could increase Spain’s GDP by around 6,000 million euros per year until 2030, that is, 130 euros per capita per year. In addition, annual net employment in the renewable sector would increase by 150,000 people. Of the new jobs, 30,000 would be in the wind sector, which would more than double the current 22,000 employees (APPA data from a few weeks ago).
Thanks to their almost zero variable cost, renewables could also reduce the wholesale price of electricity, which in 2018 represented 43% of the final price paid, on average, by consumers. This effect, which can already be seen today, will increase with the penetration of these technologies. As these new renewables no longer need economic support systems, it is foreseeable that in the medium term they will effectively contribute to reducing electricity bills in Spain, with particularly positive effects for low-income households and electro-intensive industries.
And to all of the above must be added the reduction in emissions (about 10.75 Mt CO2 in 2030 thanks to wind, equivalent to the annual emissions of a Spanish city of 1 million inhabitants), the improvement in Spanish energy dependence and lower energy bills (with positive effects on your trade balance), or the reduction in health-related costs of approximately 0.2% of Spanish GDP.
In short, the growing national and international evidence compiled in this report makes it clear that renewables in general and wind power in particular are one of the key pieces in the energy transition and sustainable development. What is needed to achieve this? Long-term political and regulatory stability to attract the necessary investments.
Carlos Solé is an Energy partner at KPMG and a member of the Editorial Board of El Periódico de la Energía.