The drop in electricity price meant that thermal assets had to either shut down or sell electricity at loss. Coal has been most affected. Already in 2019, its capacity factor was down to 13%1. In 2020, the capacity factor has been only 8%, and during the week in question it was down to 3%. Nuclear plants ran production to bare minimum and avoided shutdown at all costs: from 7 GW installed, only ca. 4 GW was being produced throughout the week. Most of the gas-powered plants (80% of which are efficient but inflexible combined cycle gas turbine plants2) had to shut down completely. Only 3-5 GW of gas capacity remained online in cogeneration selling heat. Yet, there was still excess electricity in the system, and it was dumped to France and Portugal at a very low cost (Figure 2b).
Figure 2. a) Hourly day-ahead price in Spain during Apr 27 – May 3. May 1 sees prices which are barely above zero. b) Electricity trade from Spain to France and Portugal. Positive is import, negative is export. Spain is exporting electricity to France and Portugal during Apr 29 – May 1 at a very low price.
The Transition Lab data for Spain suggests that not only coal, but also the modern combined cycle gas turbine fleet, designed to provide baseload electricity, seems to be redundant in a system built around renewables. The whole gas-fired capacity (30 GW) has had a capacity factor of 21% in 2020 (29% in 2019), making them struggle for profitability. This is the reality already now with the renewable-rich energy system we have seen in 2019 and 2020: gas is used for peaking and flexibility, not baseload. A continuing trend of this can be expected in the future when power systems reach 60%-70% renewable share frequently, and weeks like the one studied here become the new norm.
The increasing renewable penetration, intensified by the COVID-effect this spring, shows that renewables are the way towards cleaner and more affordable electricity, and they force inflexible thermal baseload out of the market. If countries like Spain had enough energy storage and flexible thermal assets, they could fully utilise the renewable energy resources even during high winds, instead of dumping excess energy to neighbours. The “COVID-spring” has offered us a glimpse into Europe’s renewable energy future, and that future demands for more flexibility to keep the system stable.
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1. Entso-e transparency platform, Actual generation per production type, online resource. Accessed Jul 28, 2020. https://transparency.entsoe.eu/generation/r2/actualGenerationPerProductionType/show
2. RED Electrica de España, The Spanish electricity system 2019 preliminary report, online resource (March 24, 2020). Accessed Jul 28, 2020. https://www.ree.es/sites/default/files/11_PUBLICACIONES/Documentos/InformesSistemaElectrico/2020/