Nuclear could help Spain reach net-zero goal, says IEA

Spain has made considerable progress towards its goal of reaching net zero emissions by 2050, but future gains need to be supported by stable policies, adequate public financing and incentives for private investment, the IEA says in its new report, Spain 2021: Energy Policy Review, released yesterday.

The IEA notes that since its last in-depth review in 2015, Spain has "solved a long-standing problem of electricity and gas tariffs not covering costs, and has closed all its coal mines, allowing the country to prioritise the issue of climate change and align its goals with EU objectives and ambitions." The country's 2050 objective for national climate neutrality calls for renewables to provide 100% of electricity and 97% of the total energy mix. Spain's energy policies are therefore centred on massive deployment of renewable energy, energy efficiency, electrification and renewable hydrogen. The share of renewables in the national electricity mix grew from 33% in 2010 to 44% in 2020.

However, the IEA says Spain's total energy mix is still heavily dominated by fossil fuels. "Notably, the transport, industry and buildings sectors all have considerable work ahead of them to meet the country's targets for renewables penetration and decarbonisation," it says.

"Though Spain's progress on ramping up renewables in its electricity mix is commendable, the future trajectory of its power mix warrants careful consideration to ensure a smooth transition," the report warns. "To start, Spain plans to phase out both coal and nuclear power generation."

Spain's phase-out of coal "appears well on track", the IEA noted, with coal only providing around 5% of electricity generation in 2019 and even less in 2020.

The country's seven nuclear power reactors (with a combined capacity of 7.4 GWe) generated 22% of its electricity in 2019. Under Spain's nuclear phase-out plans, four reactors are scheduled to close by the end of 2030, representing around 4 GWe of capacity. The remaining three reactors will shut by 2035.

"Though the new policies and increased electrification will reduce Spain's import dependency, the rapid closure of coal and nuclear facilities over the coming decade bears watching, as it could increase the country's call on natural gas, especially if new renewables capacity cannot be built as quickly as planned," the IEA said. "As such, the government will need to pay special attention to prevent natural gas generation capacity from simultaneously exiting the system. In this regard, the government should thoroughly assess the cost implications for consumers of the expedited phase-out of both coal and nuclear generation."

Preserving nuclear capabilities

Spain has developed a wide range of nuclear technological competencies since the 1960s, from nuclear power plant construction and operation, and nuclear fuel fabrication, to radioactive waste and used fuel management, the report notes. Its current national nuclear R&D activities focus on radioactive waste management and decommissioning, in line with its policy to phase out nuclear by 2035.

"On the other hand, nuclear technology is considered to have great potential to contribute to decarbonisation of not only the electricity system, but also hard-to-abate sectors, such as manufacturing and transport, through high-temperature heat supply and hydrogen production," it says. "Given the great challenge for achieving carbon neutrality in 2050, the high level of nuclear technology infrastructure and skilled professionals in Spain could be utilised more effectively for developing and implementing long-term energy strategies."

The IEA makes a number of recommendations to Spain in relation to nuclear energy. It says the government should closely monitor the financial situation of nuclear power plants to prevent unforeseen or sudden final shutdown that could significantly deteriorate the security of electricity supply. It should also pursue timely implementation of the back-end strategy, including the centralised storage facility and the deep geological repository, to avoid unnecessary cost escalation for decommissioning of reactors and radioactive waste management, including final waste disposal. The government should also develop projects that could enable the effective preservation and transfer of knowledge and expertise. In addition, it should consider the usefulness of nuclear energy - including for non-electricity applications - for diversifying technical options to achieve long-term carbon neutrality by 2050.

"When all of Spain's plans and strategies are implemented, a completely different energy sector will emerge, where fossil fuels are no longer dominant and end-user sectors are mostly electrified," the IEA said. "Such a transformed energy landscape will come with new challenges and will provide new opportunities."

"The foundations for Spain's energy system transformation will be laid this decade," said IEA Executive Director Fatih Birol. "Notably, the current economic recovery from the COVID-19 crisis presents Spain with an important opportunity to front-load clean energy investments over the next three years. I hope this report will help Spain navigate its path toward a clean and efficient energy system and a net zero future."