UNIVERZA V MARIBORU FAKULTETA ZA ELEKTROTEHNIKO, RAČUNALNIŠTVO IN INFORMATIKO Smetanova 17, 2000 Maribor, Slovenija 26 TH POWER ENGINEERING– FERI 2017 ANALYSIS OF THE SPANISH ELECTRICITY MARKET AND PROPOSALS FOR FUTURE DEVELOPMENT Ester GETINO, Emilio GARCÍA, Klemen DEŽELAK Dates, 9 - 11. May 2017

The aims of the work COOPERATION Understand the operation of the Spanish electrical system Describe the Spanish electricity market Recognize that the problems of the same not be repeated in the future Provide possible future developments in the research field COOPERATION

Illustration 1: Institute of astrophysics of Spain The aims of the work Illustration 1: Institute of astrophysics of Spain

Content Introduction 2. Historical review of the electricity market in Spain Current situation and operation of the electricity market in Spain Problems and proposals Conclusions Questions and discussion

1. Introduction “The supply of electric energy constitutes a service of general economic interest because economic and human activity can not be understood today without its existence ”- Law 54/1997 Liberalization of the electricity sector in Spain in 1997.

STRUCTURE OF THE SPANISH ELECTRICAL SYSTEM AFTER 1997 1. Introduction STRUCTURE OF THE SPANISH ELECTRICAL SYSTEM AFTER 1997 2 3 1 4 Illustration 2: Red eléctrica de España 1: Generation (free competition) 2: Transmission (natural monopoly) 3: Distribution (natural monopoly) 4: Retail (free competition) Division into 4 activities:

ELECTRICAL ENERGY GENERATION MIX 1. Introduction ELECTRICAL ENERGY GENERATION MIX 20.3% coal plants 21.8% nuclear plants 8.5% combined cycle 50.6% conventional thermal plants 36.9% renewable plants Installed power Capacity in Spain = 101,027 MW Main Problem = Foreign dependency (all fuels) -> 72.9% of the total energy resources used this year was imported (data from Eurostat year 2014)

1. Introduction ELECTRICITY DEMAND Instantaneous maximum electricity demand in Spain reached in 2015 was 40,726 MW.

INTERNATIONAL CONNECTIONS 1. Introduction INTERNATIONAL CONNECTIONS Illustration 3: ENTSO-E European goal: at least 10% for 2020. Spanish ratio: 2,8% Slovenia ratio: >18%

The Spanish electricity system continues to face the tariff deficit 2. Historical review MIBEL (Iberian Electricity Market) is created, merging the Spanish market and the Portuguese market. Red Eléctrica de España (REE) was created which involves the nationalization of the transport network The tariff deficit arose and avoiding the broken bank of the electrical system is published the Royal Decree 9/2013 1985 1997 2008 2011 2013 Today Electricity prices in Spain reach high values ​​in comparison with neighboring countries (€ 0.195 / kWh) The Spanish electricity system continues to face the tariff deficit The Law of the Electricity Sector is approved which implies the liberalization of the electricity system

3. Current situation and electricity market Free competition market and unregulated market. Unique market for Portugal and Spain: MIBEL (Iberian electricity market). WHOLESALE MARKET Illustration 4: OMIE

3. Current situation and electricity market Free competition market and unregulated market. This activity is exercised by mercantile companies. These companies acquire energy in the wholesale market and deliver it to the final consumer by hiring and paying tolls  for access to the transmission and distribution networks, which subsequently have an impact on the consumer´s electric bill.   RETAIL MARKET

4. Problems and proposals Tariff deficit Economic crisis Cost of generation in non-mainland electric systems Scarcity of energy resources in Spain Special Regime of Renewables PROPOSALS Incorporation of renewable energy without affecting the financial stability of the system European Single Market. Improvement of electrical interconnections

5. Conclusions The liberalization of the electricity sector in Spain and with it the free competition regime was a milestone for the country. This liberalization had to be carried out in a gradual and not so abrupt manner, causing the financial instability of the system and giving rise to the tariff deficit. Spain should continue betting on the incorporation of renewable energy to the energy mix while at the same time trying to reduce the tariff deficit. All Member States should bet on a single European market where the integration of renewables does not entail an extra cost for the electrical system of each country.

6. Questions and discussion

THANK YOU FOR YOUR ATTENTION UNIVERZA V MARIBORU FAKULTETA ZA ELEKTROTEHNIKO, RAČUNALNIŠTVO IN INFORMATIKO Smetanova 17, 2000 Maribor, Slovenija 26 TH POWER ENGINEERING– FERI 2017 THANK YOU FOR YOUR ATTENTION Ester GETINO, Emilio GARCÍA, Klemen DEŽELAK Dates, 9 - 11. May 2017