Madrid

It has been a full few days in Spanish capital. Between my own efforts, and a huge amount of support and assistance from teams at Austrade and the Fundación Consejo España-Australia (Spain-Australia Council Foundation), I was able to really maximise my time in the city.

Industry

I’ve been fortunate to attend several high-level meetings with significant industry players, including Acciona Energía, Fotowatio Renewable Ventures (FRV), Iberdrola, IGNIS and Naturgy Global Power Generation (GPG).  One of the real benefits of meeting with large companies has been that many of them also have other international operations, including many in Australia. As such, they are able to speak to the Spanish context, but also have a broader view on the project development environment – including the ability to compare and contrast with Australia.

Some key findings included:

• Visiting Acciona Energía’s control centre – one of five they have globally. Acciona have centralised this aspect of their operation, which allow them to more quickly, and cost-effectively, diagnose issues in their facilities, and reduce the overall number of physical maintenance call-outs required. The system is impressive; standing in Madrid, we were able to zoom in and check the oil pressure and temperature in a wind turbine in Victoria. Whilst this provides a wealth of data, and helps to reduce project operational costs, the downside of this technology is that it does little to support regional workforces where projects are located.
• Hearing about some of Iberdrola’s hydrogen projects, including their Puertollano green hydrogen facility. With a 20MW electrolyser, at the time of commission in 2022 it was the biggest in the world – and is still one of the largest. What makes the project work is that it’s located inside the fertiliser plant that it supplies the green hydrogen to. This has enabled Iberdrola to minimise transport expenses and losses, and the offtaker has also managed to find a market willing to pay a ‘green premium’ for their low-carbon product.
• The Naturgy GPG team were able to provide some interesting insights given their project development in both Australia and Spain, they noted:
  • The Spanish grid is far better networked, and a key advantage
  • The Australian community is relatively wealthy and sophisticated, so have different expectations of project developers
  • As a foreign company seeking to enter the market, there is a higher barrier to get over for community acceptance
• IGNIS are, among other things, actively working on software and systems to provide better grid demand management and to help actively manage supply and demand. These systems can both reduce the amount of generation required, as demand and supply are better coordinated, but also provide opportunity to capitalise on peaks and troughs in the power market.
• In meeting with FRV, whose focus is on solar PV projects, they highlighted that there has been some shifting in terms of community benefits. Historically, funds largely went to the local governments, and that was sufficient. Increasingly, communities are not satisfied to see governments funded to deliver services, they want greater transparency over where the funds go.

Government

I was fortunate to be able to meet with some of the team at Ministerio para la Transición Ecológica y el Reto Demográfico (MITECO – the brilliantly named Ministry for the Ecological Transition and the Demographic Challenge). MITECO manage the energy transition at the national level in Spain, including project permitting for projects over 50MW (which I explore in more detail here).

MITECO has some key challenges it is working through:

• The shutdown of the coal sector
• Implementation of the National Integrated Energy and Climate Plan (which is currently being updated)
• Energy policy
• The broader EU energy crisis, which was impacted by the Russian invasion of Ukraine.

They made some interesting observations on their work:

• The Ukraine war, and spike in gas prices, has seen a big increase in renewable uptake and a growth in energy literacy
• Support, however, for large-scale renewables is starting to decrease, whilst support for batteries and hydrogen grows
• There has been some backlash from agricultural areas who are hosting big renewable energy projects; this is not just linked to the spread of renewables, but there are a range of headwinds on the agricultural sector prompting pushback, and this is one of them
• Pre-emptive planning for transmission lines is key, as they are generating the greatest negative social response
• The energy transition hasn’t really been politicised in Spain, unlike in some other jurisdictions
• The environment varies between the autonomous communities; some are very supportive of renewable energy, have good grid connection and capacity to undertake permitting at the scale that it’s coming through; others less so
• The coal transition has forced the government to think much more about a just transition methodology, and this is starting to filter through into how they are thinking about new renewables and transmission projects

Community

In addition to industry and government, I was also able to meet with representatives from Fundación Ecología y Desarrollo (ECODES – the Foundation for Ecology and Development) and Alianza Energía y Territorio (ALIENTE – the Energy and Territory Alliance). Both citizen movement groups advocate for sustainable development and a just energy transition. They generally support decarbonisation and the implementation of renewable energy projects, but are opposed to the manner in which that development often takes place. One of ALIENTE’s key catchcries is “Renewables yes, but not like this“.

They are concerned about things like:

• Social impacts, including regional depopulation where renewables replace farmland
• The fact that the lease fees paid to farmland owners are often so lucrative that they will not say no to converting from farming to renewables
• Landscape and biodiversity impacts arising from large-scale projects
• Limited public consultation on projects, which see the community excluded from having meaningful input on projects which will impact them
• Projects are producing power in regional areas, but not really providing benefits there. They would like to see renewables doing more to improve daily life for people.

Their view is that Spain’s permitting framework does little to provide social or visual amenity protections. As noted, MITECO are looking to implement greater social consideration in future project permitting processes, but given the build-out of renewables in Spain to date, this helps to explain some of the growing opposition.

Fundamentally, the message is that the planning, economic, environmental and social parts of the transition are all linked. It is important that projects meaningfully consider all of these considerations. In doing so, they will deliver better projects and also have stronger community and public support.