unesa Electricity Report, Activities Review and Statistical Report

Transcription

1 unesa Electricity Report, Activities Review and Statistical Report

2 Letter from the Chairman 02 This statistical report from compiles the most important figures on the Spanish electricity industry for FY, the year that marked the first anniversary of my appointment to the chair of the Association's governing board. Report has become a benchmark not only for our member companies, but also for numerous external studies and industry analyses. In and 2012 so far our industry, like the other sectors of the economy, was once again shaped by the financial crisis, which is making its presence known across the board with a devastating effect on employment and an impact on practically all facets of financial, social and personal activity. Eduardo Montes. Chairman of The different measures adopted throughout the a net increase of 3,039 MW, of which conventional below the historical average, which led to a 28.8% year therefore aimed to contain the spread of the thermal plants accounted for 896 MW, wind power decline in the contribution of hydropower plants crisis and alleviate its impact, affecting the for 1,090 MW and solar power the remaining 851 MW. compared with the preceding year. member companies generation capacity in the process. Total electricity of 292,226 million kwh was Wind power electricity totalled 41,845 million kwh, produced in Spain in, a decline of 3.5% accounting for 14.3% of total production (4.4% in Over the last decade, electricity generation has compared to the prior year. Ordinary regime 2010). Meanwhile, solar plants produced 3.2% of primarily centred around natural gas combined- facilities represented 66.5% of this total (194,364 the total electricity generated in (compared to cycle plants and new renewable energy million kwh), with the remaining 97,863 million kwh 2.4% in 2010), mainly as a result of new solar thermal installations, mainly based on wind power. As a (33.5%) produced in installations operating under the facilities started up during the year. Electricity Report, Activities Review and Statistical Appendices result of this expansion, Spain s generation capacity is now highly diversified. In the year covered by this report, Spain had total installed capacity of 105,205 MW, 3% up on 2010, or special generation regime (renewable sources and cogeneration). Over 31% of production in was from renewable sources and waste, despite a drop in rainfall to The contribution from nuclear plants fell 6.9% on the prior year to 57,731 million kwh.

3 Letter from the Chairman 03 While electricity produced using natural gas fell by over 21% to 50,734 million kwh in, coal rose to invest heavily in Spain, spending 3,202 million on electricity assets in and demonstrating the key of international link-ups with Europe via France, which would lend additional stability to the system. 71.3% on the 2010 figure to 46,519 million kwh. role of companies as a driver of the Spanish economy. Specifically, our members invested 1,039 With regard to climate change, a rise in coal-based Spain recorded net electricity consumption of million in ordinary regime generation assets and power generation, coupled with a drop in production 248,390 million kwh in, 2.7% lower than the 449 million in those using renewable sources, while from other sources (hydro, wind and nuclear power), 255,263 million kwh reported in expenditure on improvements and extensions to led to an increase in the sector s CO2 emissions, lines relating to the distribution activity totalled which are estimated at some 80 million tonnes in Turning to regulation, one major milestone was the 1,714 million., around 20% more than in introduction of Royal Decree-Law 14/2010 of 23 December 2010, containing urgent measures to cut In the move towards the creation of a single The profound crisis in which Spain has been the tariff deficit in the electricity sector, one of the European electricity market progressed. At all levels submerged for some time means that now, more biggest problems currently facing s members. of the EU, calls can be heard for the integration of than ever, what we need are innovative, socially markets to achieve environmental targets and make responsible companies that are capable of riding However, other laws passed in the last quarter of more efficient use of the scarce link-up capacity out these hard times and coming out stronger than the previous year also made their effects known in between Spain and France. This interconnection is in those competitors for whom these two aspects are. These included Royal Decree 1221/2010 of 1 need of development and existing capacity can only less of a priority. That s how we see it at. October 2010, which established the procedure for be used more efficiently in the meantime if markets lifting restrictions for security of supply, allowing (in are connected without any further delay. We at It is essential that we promote the values certain circumstances) part of the energy matched believe that a firm step forward should be of corporate social responsibility such as on the daily market to be withdrawn and replaced by taken by integrating the Iberian Electricity Market transparency, ethics and commitment to society electricity produced from indigenous coal. (MIBEL) with the rest of Europe, specifically Central and the environment and encourage innovation, and Western Europe and Scandinavia. a vital tool for companies to keep improving their Another of the year s regulatory landmarks was the systems, products and services while becoming approval of the Renewable Energies Plan, which we From an environmental perspective and to reduce more productive and competitive in the process. at consider to be highly ambitious, given that our energy dependency, it is vital that we continue That's why 's members have a clearly defined exceeding the European Union commitment of 20% is to make use of renewable sources, and the main innovation policy and consider this to be a key Electricity Report, Activities Review and Statistical Appendices not a very realistic goal in our present circumstances. Although times are hard in the Spanish and neighbouring economies, with credit tight and borrowing costs high, 's members continued way of doing so is by harnessing their electricity generation potential. That said, the penetration of these sources must hinge on their efficiency and competitiveness particularly given the present financial circumstances as well as the development strategic factor to meet the challenges facing the energy sector. We also need to find a different way to grow by pledging our commitment to efficiency, to avoid

4 Letter from the Chairman 04 squandering resources, to achieve returns on our investment and to focus expenditure on what is essential. As such, we feel it is vitally important that a widereaching agreement on energy matters be reached in Spain, centred on the three fundamental axes: safety, respect for the environment and, now more than ever, competitiveness. Only if we make efficiency and competitiveness nonnegotiable requirements can we overcome these bad times and ensure a reliable, balanced electricity system that allows us to look to the future and move forwards. Eduardo Montes Chairman of Electricity Report, Activities Review and Statistical Appendices

5 Introduction and Board of Directors 05 Althoug s origins can be traced back to 1944, it was not incorporated as a business association until 24 June The most senior governing body is composed as follows: CHAIRMAN Mr. Eduardo Montes Pérez del Real BOARD MEMBERS Mr. Borja Prado Eulate (Endesa). Mr. Ignacio Sánchez Galán (Iberdrola). Mr. Salvador Gabarró Serra (Gas Natural Fenosa). Mr. Manuel Menéndez Menéndez (HC Energía). Mr. Miguel Antoñanzas Alvear (E.ON España). ALTERNATIVE BOARD MEMBERS Mr. Andrea Brentan (Endesa). Mr. José Luis San Pedro Guerenabarrena (Iberdrola). Mr. Rafael Villaseca Marco (Gas Natural Fenosa). Mr. Joao Manso Neto (HC Energía). SECRETARY Mr. Pascual Sala Atienza. The Association has a qualified team of professionals specialised in its different areas of work, flexibly structured around the main axes of electricity activity through the rendering of services to the companies which comprise the Association, as well as tasks related to the institutional representation of the sector. Electricity Report, Activities Review and Statistical Appendices

6 ELECTRICITY REPORT The current framework: economy, resources and energy policies 02 Electricity generation 03 Electricity transmission and distribution 04 Industry regulations 05 Economics and finance Electricity Report

7 1. The current framework: economy, resources and energy policies 07 THE SPANISH AND GLOBAL ECONOMIES: IS RECOVERY SET TO CONTINUE? The United States recorded GDP growth of 1.7% in (compared to 3% in the prior year), boosted by a rise in household spending. The Japanese GDP THE SPANISH ECONOMY Like our neighbouring countries, Spain was dealt THE GLOBAL ECONOMY shrank by 0.7% in (according to OECD data); a severe blow by the financial crisis last year, the earthquake and tsunami which rocked the compounded by the prolonged instability of the The global recovery that began in 2009 continued country in the first quarter were a major blow to global financial markets, causing market confidence throughout, mainly driven by the emerging the Japanese economy, with a significant decline in to plummet and bringing tighter lending conditions economies. According to OECD figures, the G-20 industrial activity and in the energy sector, mainly in the private sector, as well as a rocketing nations achieved gross domestic product (GDP) due to the damage caused to nuclear plants, forcing unemployment rate. growth of 2.8% in, compared to a more dynamic the country to import higher quantities of natural rate of 5% recorded in Although improvement gas and coal. The November general elections and consequent was seen throughout the developed economies, slowdown in activity made an unusual year for doubts continue to linger as to the medium-term Inflation also rose in the European Union in, Spain. sustainability of the recovery seen in some areas. with year-on-year growth of 3.1% (according to the consumer price index published by Eurostat), partly While certain signs of recovery began to emerge saw a continuation of the dichotomy between due to increases in energy and food prices. towards the end of 2009 and during 2010, as the relatively weak growth (or even decline) reflected in electricity use (which increased 2.9% observed in some advanced economies (including Turning to Asia, China once again boasted a dynamic overall in 2010), electricity demand in Spain fell by Spain) and the strength of emerging countries such economy in, with GDP up by 9.2% over the year 2.7% in. as China, India and various Latin American nations. and expansion moving at an even faster rate, mainly due to robust internal demand. The main risk for Both the Spanish government (led by the Partido The situation in the Eurozone was marked by this economy is inflation (the Chinese CPI grew 5.4% Popular s Mariano Rajoy since the November episodes of financial instability and a widespread over the year). Economic activity also flourished elections) and national and international bodies downturn in activity, with serious doubts and throughout the rest of Asia, particularly in India, specialising in this area believe that it will be mistrust arising with regard to several Eurozone where growth continued in response to robust several years before Spain recovers the GDP values economies (the situation of states such as Germany internal demand, also marked by a widespread rise and unemployment rate existing before the crisis cannot, obviously, be compared with others such as in inflation (8.9%). broke out in 2008, despite the measures taken Spain). to combat this situation arising (including the GDP growth was positive in Latin America due to the approval of Law 2/ on sustainable economy and Electricity Report Expansion continued to be driven by exports, as internal spending (particularly household spending) has yet to get back on its feet. strength of demand and the employment market, with countries such as Brazil, Argentina and Chile recording year-on-year GDP growth rates of over 6%. structural reforms in areas such as the employment market, the fight against fraud and the financial markets).

8 The current framework: economy, resources and energy policies 08 In contrast with the more buoyant recovery rates recorded by other Eurozone countries, the Spanish The new government began its tenure with farreaching reforms in all areas of the economy One notable case is China, which consolidated its position as the world's leading energy user, GDP grew by only 0.7% in. Moreover, this slight (employment, fiscal policy, energy, healthcare, definitively supplanting the United States at the top improvement was mainly seen in the first half of education), with the challenging task of attempting of this ranking. the year, before the economy gradually weakened, to halt the serious unemployment problem and to ending the year with a 0.3% decline between October reduce Spain's deficit. All the signs indicate that non-oecd countries and December compared to the same period in 2010 (data from the National Office of Statistics (INE)). INTERNATIONAL ENERGY MARKETS will increasingly drive energy market dynamics. These economies are expected to account for 90% of the growth in production, 70% of the increase Forecasts by Spanish and international bodies SITUATION OF THE INTERNATIONAL ENERGY in economic product and 90% of the rise in energy and developments in financial circumstances MARKETS demand from 2010 to imply that the GDP will be hit once again during 2012, doubtlessly affecting the already soaring It appears clear that in years to come the energy According to the IEA's forecasts, China will unemployment rate, which ended at 22.85% scenario will be characterised by the effects of the consolidate its position as the world's leading and continued to rise in the opening months global financial recession. The developed countries energy consumer, using approximately 70% more of the present year to reach 24.3% by April (the are likely to move towards less energy-intensive energy than the United States, the world's second- highest unemployment rate in the European Union economic growth models, due to either the adoption largest user, by 2035, with India, Indonesia, Brazil according to Eurostat). of end-use energy efficiency programmes (as well and the Middle East expected to record even faster as the need to reduce CO2 emissions) or structural growth rates. The moderate decline in production in reflects changes to the energy production mix. the diminishing domestic demand (-1.7% according The estimates also indicate that a total of USD38 to Bank of Spain figures). Household spending and Growth among the non-oecd economies in 2010 billion will have to be invested in the global energy business investment also lost ground (-0.1%) and (the last year for which data are available at the date infrastructure between and 2035, with non-oecd spending by public authorities fell 2.2% as a result of of this report) led to a remarkable rise in energy countries accounting for almost two thirds of this budget consolidation measures. Dwindling internal consumption - 5% according to the International sum. Oil and gas, which not only require investment in demand was, however, mitigated by a positive Energy Agency (IEA) - with a consequent increase in exploration and production but will also be affected contribution from net external demand, based on a CO2 emissions. by rising associated costs in the medium to long term, healthier export market. account for almost USD20 billion of this total figure. This global rise in energy consumption contrasts The remaining investment will mainly be required in Electricity Report Inflation increased over the year with an average CPI growth rate of 3%, influenced by rising energy prices. sharply with the 1.1% drop observed in the preceding year (2009 compared to 2008). the electricity sector, with 40% channelled into the transport and distribution grids.

9 The current framework: economy, resources and energy policies 09 Although fossil fuels continued to dominate international energy consumption by type of 860,000 barrels (+10.4%). The United States, Russia and Brazil also contributed significant growth. was concentrated in the United States (140,000 barrels per day, a rate of 17%), where production primary resource in 2010, the World Energy is subsidised, and Brazil (50,000 barrels per day or Outlook (published annually by the IEA) expects this In the refined products category, the middle distillates 11.5%), where it is not. dominance to decline in the years to come. While - fuels used in industry and commerce - presented the demand for all fuels will rise, the proportion of global most significant improvement, recording growth of Although the other OPEC members responded to energy consumption represented by fossil fuels is 4.4%. On the other hand, growth in petrol demand was the loss of 1.4 million barrels per day from Libya by expected to decrease slightly, from 81% in 2010 to relatively weak (stagnating in the OECD), probably due increasing production, this was not sufficient on 75% in Of the fossil fuels, only natural gas will to high prices and sluggish economies. the whole to cover the gap. OPEC production is still become more prevalent in the global energy supply below pre-uprising levels and commercial storage of in the period up to In the electricity sector, On the particular subject of prices, an unusual oil continues to drop. renewable energy technologies, led by hydro- and stability was observed for most of 2010, only broken wind power, will account for half of the new capacity in the fourth quarter of the year when consumption NATURAL GAS installed to respond to the growing demand. began to outgrow production. Preliminary data for reveal major price surges (aggravated by the riots As with oil, natural gas consumption grew in The global energy market continues to be and exceptional circumstances in North Africa and the 2010 (after having dropped 2.1% in 2009). Global characterised by high price volatility, reflecting the Middle East), leading to a decline in consumption. demand for this fuel was boosted by the economic difficulty of striking a balance between supply and circumstances and a robust rate of consumption demand. Oil production grew by 1.8 million barrels per day. among non-oecd countries, coupled with weather Although this 2.2% growth rate was the highest since conditions during the year, leading to global growth OIL 2004, it was unable to match the rise in consumption. in natural gas consumption of 7.4%. Crude oil production in non-opec countries Global oil consumption grew by 3.1% in 2010 (a daily increased by 860,000 barrels per day (+1.9%), with Production increased by 7.3% (compared to a 2.1% increase of 2.7 million barrels), reaching a record China recording its largest ever increase as a result decline in 2009), largely due to growth in Russia and daily total of 87.4 million barrels, more than doubling of higher offshore production. Russia and the United the Middle East. the average rate for the previous ten years. This was States also contributed significantly to this figure, the first increase in oil consumption in the OECD while Norway experienced the greatest reduction in The plentiful global gas supply kept spot prices since production in the world. Production by OPEC member below oil-indexed prices. states grew by 960,000 barrels per day, a rate of 2.5%. Electricity Report China made the largest contribution to this increase (according to data from the BP report Statistical Review of World Energy ), with a daily rise in oil consumption of This was complemented by growth of 240,000 barrels per day (+13.8%) in biofuels. This increase In terms of demand, competition with coal in the electricity generation sector has begun to influence gas prices. According to the annual BP energy

10 The current framework: economy, resources and energy policies 10 report, favourable pricing conditions encouraged generators to switch over from coal to gas in the COAL followed by the United States (540 Mtoe), Australia (228 Mtoe) and India (212 Mtoe). China and India second half of Coal continues to be an extremely important source therefore represent over half of the world s total of primary energy, accounting for approximately consumption of this energy source. The IEA has also reported that the non-oecd 29% of global consumption, a proportion that has member countries accounted for 80% of the rise in remained stable over recent years. At international Average import costs for thermal coal in Europe gas demand in Fuel diversification policies level, production is concentrated in the OECD (including Spain) were more stable than those helped to spread the use of gas in China. countries as well as emerging economies such as associated with crude oil and natural gas imports China and India. throughout However, by year end coal prices Over the last five years global LNG supply has were increasing at a similar rate to hydrocarbons. recorded accumulated growth of 58%, increasing at Similarly to the other fuels, in 2010 coal production a rate three times faster than total gas production. and consumption recorded above-average growth INTERNATIONAL FOSSIL FUEL RESERVES Similarly, LNG supplies rose 22.6% (55,000 million of 6.3% (220 million tonnes of oil equivalent) and 7.6% cubic metres) in atar strengthened its (250 tonnes of oil equivalent), respectively. The volume of proven reserves (particularly position as the world s leading LNG supplier by hydrocarbon reserves) varies over time as new increasing exports by 53% (26,000 million cubic The non-oecd countries continued to lead deposits are discovered in drilling campaigns metres) in 2010 and this trend continued into consumption. Notable examples are China and India, and extraction rates fluctuate in active oil wells. (according to the provisional data available). where the use of coal increased by 10% (157 million Exploration projects and oil well extraction tonnes of oil equivalent) and 11% (27 million tonnes techniques have become more efficient since the Improvement was not only observed in volumes, but of oil equivalent), respectively. 1980s, allowing a more positive, or, at the very least, also in gas market coverage in response to growing stable outlook for depletion. opportunities: atar exported LNG to 19 countries The international coal trade recorded estimated in 2010, four more than in the previous year, and growth of 17.5% in 2010, rising more than twice as At the 2010 year end oil reserves amounted to 1,383 the four largest importers now source gas from an quickly as consumption. Relatively high domestic billion barrels, 6,000 million barrels up on the prior average of 14 countries, compared to nine in prices kept China in second place in the global year (BP "Statistical Review of World Energy"). As is ranking of imports (behind Japan), while coal well known, reserves of this primary energy source Global gas markets are becoming integrated, imported for fuel fell in Europe due to competition are highly concentrated in specific geographical with increasing flexibility to handle the impact of from gas, with coke imports rising in line with steel regions. external influences, ensuring that the gas markets production. Electricity Report were well-positioned to deal with the cut-off of Libyan supply and the consequences of the earthquake in Japan. China continues to record high coal production and consumption (both approximately 1,500 Mtoe), Approximately 77% of the world s reserves are located in OPEC countries, with Middle Eastern nations representing approximately 54% of

11 The current framework: economy, resources and energy policies 11 international oil reserves: 19% in Saudi Arabia, 10% in Iran, 8% in Iraq, 7% in Kuwait and the remaining US (27.6%), Russia (18.2%), China (13.3%), Australia (8.9%) and South Africa (3.5%). Spain has reserves of in operation and envisage the introduction of new safety regulations to deal with natural disasters. 7% in the United Arab Emirates. Based on current 5.3 thousand Mt of low-quality coal, representing production levels, proven oil reserves are expected 0.1% of the global total. Coal is expected to deplete The renewable energy sources have made a to last approximately 46 years, a figure that has at a slower rate than the hydrocarbons, with significant contribution towards achieving remained virtually unchanged over the last decade. existing reserves estimated to last approximately sustainability objectives in international energy 120 years. supply. Investment in exploration has been focused on Western Africa, Russia, the Caspian Sea, North The environmental problems caused by burning Hydropower use grew 5.3% in 2010 (the rainiest America and the North Sea. Exploration activity has coal mean that the use of this fuel for electricity year since 1900). The IEA expects this source s also been notable in Latin America, particularly in generation will depend on the success of new contribution to global electricity generation to more politically stable nations with a more solid technology for capturing and storing CO2, research remain constant in the coming years at around 15%. institutional and regulatory framework. into which is being promoted by a number of nations, including some EU countries. Last year also saw an increase in the proportion of At the 2010 year end, global natural gas reserves global generation represented by other renewable totalled thousand bcm (thousand million m3) NON-FOSSIL FUELS sources, both in electricity generation (wind, solar, and were mainly located in the Middle East (40.5%) geothermal, biomass and waste-to-energy) and in and Russia (23.9%). Significant deposits were also Non-fossil energy sources recorded overall growth biofuels for transport (ethanol and biodiesel). These found in the former Soviet Republics in Central Asia of 4.8% in sources represented 1.8% of global primary energy and the Caucus (around 5%), the US and Canada (5%), in 2010, with renewable energy used for electricity Africa (7.9%) and the European Union (1.3%). The share of global energy use represented by generation accounting for 1.3% and biofuels making nuclear energy grew 2% compared to the prior up the remaining 0.5%, tripling the percentages At current production levels, these reserves are year, reversing the trend shown in prior years, recorded ten years ago. expected to run out in an average term of 63 years, when nuclear generation was beset by numerous outlasting global oil reserves by around 20 years. stoppages. Even though total renewable energy consumption rose by 15.5% during the year, the OECD (with an At the 2010 year end, global coal reserves stood at Although the US and a number of European increase of 12.4%) did not achieve the growth approximately 861 thousand Mt (thousand million countries were keen to re-start their nuclear rates recorded in the boom years, 2007 and tonnes). Reserves of this resource are much more programmes (due to the need for a domestically Nonetheless, and although growth in non-oecd Electricity Report widespread than those of oil and natural gas, with just over 40% of reserves located in OECD countries. Major coal reserves can be found in the available, cheaper energy source), events in Japan during the first quarter of led them to reconsider these plans, inspect the plants currently countries continued to accelerate, reaching 27.7% in 2010, the OECD represents 78% of all global renewable energy use.

12 The current framework: economy, resources and energy policies 12 Renewable sources accounted for 3.3% of global energy generation in 2010, but this proportion Coal-based electricity generation grew significantly in, around 70% up on the prior year (when it and competition from other energy sources. The 4.2% decline contrasts with estimated GDP growth fluctuates widely between countries in a sector dropped 30% to a historical low), notably influenced of 0.7% (according to provisional figures from the traditionally dominated by Europe. The acceleration by a measure adopted by the Spanish government in National Statistics Office), reflecting the widening in non-oecd countries is largely down to China, February to assist the mining industry, whereby gap between these two indicators during. which has replaced the United States as the world s the electricity sector was forced to use up part of its leading wind power generator. bituminous coal and anthracite stocks. Weak performance was also observed in demand for vehicle fuels in, with a 4.6% decline to Finally, the importance of non-commercial biomass An examination of consumption by primary energy million tonnes. Petrol demand fell 6.6% while (in its natural form) must not be dismissed. This is a type in Spain shows that the use of oil in vehicle diesels fared somewhat better with a drop crucial source of energy for numerous developing totalled 58,317 Ktoe, compared to 60,993 Ktoe in of 4.1%. Motor vehicle fuels represented 43.4% of areas around the globe, where conventional 2010, representing 45.1% of the primary energy total demand for oil-based products in Spain in. energy sources have not yet arrived or have limited consumed in Spain. In terms of final energy, Spanish One positive note is the rise in annual demand for coverage (large parts of Asia, Latin America and consumption of oil-based products totalled 50,379 kerosene, which is 6.1% up on the prior year. Africa), and where it is used in homes and small Ktoe in, accounting for over 54% of the annual industry. This source is not usually included in total. Natural gas is a key feature of Spanish energy energy statistics as it is difficult to assess, but its policies aimed at reducing greenhouse gas inclusion would increase the proportion of global The scarcity of domestic oil production (less than emissions to meet Kyoto Protocol targets, and its consumption represented by renewable energies by 1%) means that the vast majority of the oil used use is becoming increasingly common at combined- six percentage points to approximately 13%. in Spain has to be imported. Imports of crude oil cycle energy generation plants. totalled million tonnes in, 0.6% down on ENERGY CONSUMPTION IN SPAIN Imports from the OPEC fell by 8.6%, basically Spanish natural gas consumption totalled 28,930 due to a drop in imports from Libya. Russia Ktoe in (compared to 31,082 Ktoe in 2010), Spain is not a nation rich in fossil fuel reserves. For maintained its position as Spain s leading supplier, representing 22.3% of total primary energy example, domestic oil and natural gas production increasing its proportion by 19.7% to account for consumed in Spain. As a source of final energy, do not even account for 1% of total consumption 15.3% of total imports, followed by Saudi Arabia with gas accounted for 14.3% of total consumption, 0.8 of these hydrocarbons. Although coal reserves are 14.7% and Iran with 14.4%. percentage points down on the 2010 figure, and was more extensive, they are still relatively small and the source used to produce approximately 28% of of a poor quality and are therefore mainly used for In, million tonnes of oil-based products the total electricity generated within Spain. Electricity Report electricity generation. Spain s hydropower and wind and solar energy potential is, however, relatively high compared to its neighbouring countries. were consumed, 4.2% down on the preceding year. This contraction is attributed to weakness in internal demand, high temperatures (1.4ºC above average) In, Spain s principal gas supplier was Algeria, accounting for 38% of total imports, followed by

13 The current framework: economy, resources and energy policies 13 Nigeria (19.5%), atar (13%), Norway (8.2%), Trinidad and Tobago (6.9%), Egypt (6.5%), Peru (5.2%), Oman (0.5%), Libya (0.2%) and other countries (1.9%). with a combined total of over 15,100 Ktoe, keeping Spain on track to meet the target proportion of 20% set by the EU for These figures show that Spain diversifies its supply as much as possible, both geographically and economically speaking and in terms of areas of influence, thus considerably improving its security of supply. The Medgaz gas pipeline, which connects Algeria and Spain, came into service in. Spain s high regasification capacity has made the system must more flexible in terms of management and the possibility of diversifying supply sources. Therefore, aided by its geographical location, Spain is fast becoming a major hub for the transportation of gas to Europe, provided that the capacity of existing links with France is extended. Coal consumption in totalled 12,456 Ktoe (compared to 7,156 Ktoe in 2010), which is 9.6% of total primary energy consumption in Spain and 4.1 percentage points up on the prior year. Coal accounted for some 1,614 Ktoe of final energy use, 4.6% down compared to Energy saving and efficiency plans are crucial if future challenges are to be met, although Spain only began to show improvements in this area in The country s energy intensity, measured in Ktoe of primary energy consumed for every million Euros of GDP, fell by 5.6% between 2006 and 2010 (comparable years in terms of GDP). A reduction of 11.3% in final energy use was achieved between 2004 and as a result of work carried out under the Spanish Energy Efficiency Strategy. All of this demonstrates the Spanish energy sector s increasing efficiency, to which the electricity sector has contributed an increased use of higherperformance technologies in the mix of generation sources. Electricity Report In, primary energy from nuclear plants represented 11.6% of total consumption, compared to 12.4% in Hydropower and other renewable energy sources accounted for 2.0% and 9.7%, respectively, of total consumption in the same year,

14 2. Electricity generation 14 This chapter deals with the size of the Spanish electricity generation system and its power output in. First we will look at the performance of the ordinary regime generation system, including s member companies, and then the entire Spanish system, combining the ordinary regime with estimated installed capacity and electricity produced by special regime facilities. Where deemed necessary, figures for all companies as a whole have been included. ORDINARY REGIME GENERATION SYSTEM GENERATION PLANTS Installed capacity Table 2.1. New power capacity, ordinary regime. Plants kw Hydroelectric: Contreras II 14,120 Conventional thermoelectric: Nuclear Almaraz I 53,710 CC Puerto de Barcelona Grupo I 34,530 CC Puerto de Barcelona Grupo II 18,450 CC Málaga 11,970 CC Bahía Algeciras 830,907 TOTAL POWER CONNECTED TO THE GRID 963,687 Source: Unesa, REE In the electricity companies operating under the ordinary regime connected new capacity of 964 MW to the system, the majority of which corresponds to natural gas combined cycles. All of these combined cycle plants were contributed to the system by s member companies. (Table 2.1). In s members also retired generation facilities with total capacity of 37.5 MW (a hydroelectric plant). (Table 2.2). Table 2.2. Installations put out of service, Ordinary regime. Plants kw Hydroelectric Contreras II 37,500 TOTAL CAPACITY LOST 37,500 Source: Unesa, REE Considering the aforementioned variations, at 31 Electricity Report December installed capacity in the ordinary regime totalled 68,977 MW, broken down as follows: 25,175 MW pertaining to natural gas combined cycle plants (36.5%); 17,059 MW to hydroelectric capacity (24.7%); 12,171 MW to coal plants (17.7%); 7,849 MW to nuclear plants (11.4%); and the remaining capacity

15 Electricity generation 15 Table 2.3. Installed capacity under the Ordinary Regime. of 6,723 MW to fuel oil and other oil-based product plants and to fuel oil and natural gas mixed biofuel plants. (Table 2.3) and (Graph 2.4). Type of plant MW % Hydroelectric 17, Conventional thermoelectric: Coal 11, CC Coal gasification Natural gas, combined cycle 25, Fuel oil and other petroleum products 5, Fuel oil-natural gas 1, Total 44, Nuclear thermal 7, TOTAL 68, Graph2.4. ORDINARY REGIME POWER CAPACITY BY TYPE OF PLANT (MW) 26,000 25,175 24,279 In ordinary regime installed capacity represented 65.6% of total electricity generation capacity in Spain, which amounted to 105,205 MW and comprised ordinary and special regime installed capacities, broken down by plant type as follows: ordinary regime hydroelectric capacity accounted for 37.9% of hydroelectric, wind and solar plant installed capacity, while ordinary regime thermal capacity represented 84.3% of total thermal capacity in Spain, which includes cogeneration, waste and biomass. 100% of nuclear energy is produced under the ordinary regime. (Table 2.5). 22,000 18,000 14,000 17,082 17,059 12,171 12,171 Table 2.5. Share of installed capacity companies under the Ordinary Regime in Spain. 10,000 6,000 7,795 7,849 6,723 6,723 Type of plant % Hydroelectric, wind and solar 37.9 Electricity Report 2, Hydroelectric Nuclear Coal C.C. natural gas Fuel oil and fuel oil-natural gas Conventional thermoelectric 84.3 Nuclear thermal 100 TOTAL 65.6

16 Electricity generation 16 Installed capacity in mainland and non-mainland systems At the year end, installed capacity under the ordinary regime totalled 63,786 MW for the mainland system and 5,191 MW for the non-mainland system; 92.5% and 7.5%, respectively, of total ordinary regime capacity. Installed capacity varied throughout. In the mainland system was up 927 MW on 2010, while there was no change in the nonmainland system. The positive balance in the mainland system was due to the incorporation of 964 MW of new capacity, as well as the retirement of hydroelectric plants. The non-mainland system (which operates in the Balearics, the Canary Islands, Ceuta and Melilla) comprises a 510 MW imported coal plant located in the Balearics, as well as a large number of thermal plants that use oil-based products and have a combined capacity of 4,681 MW. Combined cycle plants operating with oil-based products make up 1,780 MW of this amount, with 935 MW corresponding to the Balearics and 845 to the Canary Islands. (Table 2.6). ANNUAL ELECTRICITY GENERATION Annual generation by plant type In gross generation by the electricity companies operating under the ordinary regime totalled 194,364 million kwh, down 4.8% on Hydroelectric generation amounted to 27,571 million kwh, representing 14.2% of total generation and a 28.8% decrease compared to Thermal generation clearly leads the field, with 109,062 million kwh and 56.1% of the total, up 5.4% on the prior year. Nuclear generation shrank by 6.9% compared to 2010, down to 57,731 million kwh (29.7% of total ordinary regime generation). (Table 2.7) and (Table 2.8). In, generation by companies operating under the ordinary regime accounted for 66.5% of total generation in the country, which amounted to 292,226 million kwh. Hydroelectric generation under the ordinary regime made up 32.8% of total hydroelectric, wind and solar plant generation in Spain; thermal generation under the ordinary regime accounted for 72.5% of total generation in conventional, cogeneration, waste and biomass thermal plants; and 100% of Spanish nuclear energy was produced under the ordinary regime. (Table 2.9). Electricity Report In s member companies produced 185,995 million kwh under the ordinary regime, representing 95.7% of the total for that regime and 63.6% of total energy generation in Spain. The remaining ordinary regime generation corresponds to companies that are not members of, the majority of which operate through natural gas combined cycle plants.

17 Electricity generation 17 Table 2.6. Power capacity under the Ordinary Regime in Spain. (MW) Table 2.7. Electricity generated under the Ordinary Regime in Spain. Type of plant Mainland Non-mainland TOTAL Hydroelectrical 17,059-17,059 Coal 11, ,851 CC Coal gasification Natural gas, combined cycle 25,175-25,175 Fuel oil 508 4,681 5,189 Fuel oil-natural gas 1,534-1,534 Nuclear 7,849-7,849 TOTAL 63,786 5,191 68,977 Type of plant Millones kwh /2010 (%) Hydroelectric 27, Conventional thermal 109, Nuclear thermal 57, TOTAL 194, Table 2.8. Structure of electricity generated under the Ordinary Regime in Spain. (%) Table 2.9. Share of electricty generated in Spain under the Ordinary Regime. Type of plant 2010 Hydroelectric Conventional thermoelectric Nuclear thermal TOTAL Type of plant (%) Hydroelectric, wind and solar 32.8 Conventional thermoelectric 72.5 Nuclear thermal TOTAL 66.5 Electricity Report

18 Electricity generation 18 Monthly generation In the highest monthly generation under the mainland ordinary regime was recorded in January (17,090 million kwh), with the lowest in April (13,342 million kwh). Monthly generation in August was the second-highest during the year, totalling 16,062 million kwh. Grafico 2.10.Monthly ordinary regime electricity generation in the mainland. (Million kwh) At hydroelectric plants, monthly generation fluctuated between a maximum of 4,786 million kwh in January and a minimum of 1,142 million kwh in September. Total annual hydroelectric generation (27,571 million kwh) was typical of a drier-thanaverage year, with the highest generation recorded Hydroelectric, wind in January-May. Due to a greater number of refuelling outages, nuclear energy generation in was down 6.9% compared to In monthly terms, maximum Thermal generation levels were reached in August (5,537 million kwh), with the minimum recorded in May (3,797 million kwh) Electricity Report Thermal plants have had to adapt their monthly production to hydroelectric, nuclear and special regime generation, with their monthly generation at its lowest in April and being required to meet a higher demand for electricity during the rest of the year. Monthly generation by thermal power plants ranged from 9,581 million kwh in September to a minimum of 5,493 in April. (Graph 2.10) January February March April May Nuclear June July August September October November December

19 Electricity generation 19 Generation by autonomous region generation, although the highest figures were in Catalonia, with 17.9% of the total, and Andalusia, Canary Islands and Aragón (6.6%, 5.7%, 4.6% and 4.5%, respectively, of the total). The rest of the country s As previously mentioned, in generation by close behind with 12.2%. These regions were followed autonomous regions contributed 8.0% of total s member companies under the ordinary by Castilla y León, Extremadura, Galicia, and Valencia generation by companies operating under the regime totalled 185,995 million kwh. There is no (12.0%, 10.6%, 8.9% and 8.8%, respectively), with lower ordinary regime. dominant autonomous region with respect to generation seen in Castilla-La Mancha, Asturias, the (Table 2.11) and (Graph 2.12). Table Distribution of electricity generation by autonomous community in. Unesa (%) Graph Electricity generation by autonomous region. (%) Electricity Report Autonomous community (%) Catalonia 17.9 Andalusia 12.2 Castilla y Leon 12.0 Extremadura 10.6 Galicia 8.9 Valencia 8.8 Castilla-La Mancha 6.6 Principality of Asturias 5.7 Canary Islands 4.6 Aragon 4.5 Balearic Islands 3.0 Murcia Region 2.7 Navarra 0.7 Basque Country 0.7 Others 0.9 TOTAL CATALONIA ANDALUSIA CASTILLA Y LEON EXTREMADURA GALICIA VALENCIA CASTILLA-LA MANCHA PRINCIPALITY OF ASTURIAS CANARY ISLANDS ARAGON BALEARIC ISLANDS MURCIA REGION NAVARRA BASUE COUNTRY 0,7 0,7 2,7 3,0 4,6 4,5 5,7 6,6 8,9 8,8 10,6 12,2 12,0 17,9

20 Electricity generation 20 Electricity Report Generation in mainland and non-mainland systems In ordinary regime generation in the mainland system totalled 179,525 million kwh, accounting for 92.4% of total generation for this regime and down 5.1% on The companies operating under the ordinary regime within the non-mainland system generated 14,839 million kwh, i.e. 7.6% of total generation and a fall of 1.9% compared to the prior year. There is no dominant area of generation within the mainland system. In gas combined cycle plants contributed 28.3% of the total, nuclear plants accounted for 32.2%, hydroelectric plants 15.4% and coal plants 24.2% of total generation under the ordinary regime. Fuel oil plants and fuel oil and natural gas bio-fuel plants generated no power during the year, for the first time since these facilities came into service during the 1960s. Of the power generated in the non-mainland system, 79.6% was obtained from thermal fuel oil and oil-based product plants, and 20.4% came from imported coal plants. (Table 2.13) and (Table 2.14). Table Ordinary Regime generation in Spain (million kwh) Type of plant Mainland Non-mainland TOTAL Hydroelectric 27,571-27,571 Coal 41,871 3,031 44,902 CC Coal gasification 1,617-1,617 Natural gas, combined cycle 50,734-50,734 Fuel oil-natural gas 0-0 Fuel oil 0 11,808 11,808 Nuclear 57,731-57,731 TOTAL GENERATION 179,525 14, ,364 Table Ordinary Regime generation structure. (%) Type of plant Mainland Non-mainland TOTAL Hydroelectric Coal CC Coal gasification Natural gas, combined cycle Fuel oil-natural gas Fuel oil Nuclear TOTAL

21 Electricity generation 21 Electricity Report Compared to 2010, the mainland system only saw growth in power generated by coal plants (up 89.5%). Generation by the country s other plants in was lower than in 2010, with hydroelectric plant generation dropping by 28.8%, natural gas combined cycle plant generation falling by 21.3% and nuclearbased electricity down 6.9%. Coal generation for the non-mainland system decreased by 10.4% in, while generation by fuel oil and oil-based product plants remained stable. (Table 2.15). Considered as a whole, in ordinary regime generation was down by 9,888 million kwh compared to 2010, while hydroelectric plants decreased generation by 11,167 million kwh and nuclear plant generation rose by 4,260 million kwh. In the other plants, natural gas combined cycle production fell by 13,745 million kwh, while coal plant generation rose by 19,424 million kwh. (Graph 2.16). HYDROELECTRIC GENERATION In hydroelectric generation under the ordinary regime amounted to 27,571 million kwh, a 28.8% decline compared to Considering the reduction in hydroelectric reserves at year end and the power generated by pumping equipment, can be classified as a dry year in terms of the contribution from the hydroelectric sector. Table Changes in Ordinary Regime generation /2010 (%) Type of plant Mainland Non-mainland TOTAL Hydroelectric Coal CC Coal gasification Natural gas, combined cycle Fuel oil-natural gas Fuel oil Nuclear TOTAL PRODUCTION Graph ORDINARY REGIME ELECTRICITY GENERATION BY TYPE OF PLANT (Million kwh) 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, ,738 61,991 27,159 64,479 27,571 57,731 46,519 50,734 11,863 11, Hydroelectric Nuclear Coal C.C. natural gas Fuel oil and fuel oil-natural gas

22 Electricity generation 22 In pump consumption was 3,245 million kwh, a 27.2% drop compared to 2010 figures. At the year end hydroelectric reservoir capacity stood at 18,538 million kwh and hydroelectric reserves were down from 12,366 million kwh at 31 December 2010 to 9,691 million at 31 December. Expressed in terms of reservoir capacity, reservoir levels decreased from 67% to 52% over as a whole. (Table 2.17) (Graph 2.18) and (Graph 2.19). Table Status of hydroelectrical reservoirs (million kwh) Capacity and reserves 31/12/ /12/ /12/ Annual reservoir capacity 8,382 9,007 8,967 Multi-year reservoir capacity 9,544 9,544 9,571 TOTAL CAPACITY 17,926 18,551 18,538 Annual reservoir reserves 5,089 5,500 3,834 % of fill-up Multi-year reservoir reserves 4,048 6,866 5,857 % of fill-up TOTAL RESERVES 9,137 12,366 9,691 % of fill-up Source: REE. Graph Evolution of reservoir levels at 31 December (%) Graph Energy stored in reservoirs on the last day of the month and Electricity Report ,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Mill.kWh December November October September August July June May April March February January December November October September August July June May April March February January

23 Electricity generation 23 CONVENTIONAL THERMAL GENERATION In conventional thermoelectric plants operated by companies under the ordinary regime generated a total of 109,062 million kwh, up 5.4% on the 103,501 million kwh recorded in the prior year. Coal plant generation in totalled 46,519 million kwh, up 71.3% on the prior year. In addition to this generation, imported coal plants contributed 19,341 million kwh of energy, domestic bituminous coal and anthracite plants 18,867 million kwh, domestic sub-bituminous coal plants 6,693 million kwh and coal gasification plants 1,617 million kwh. This production was in general higher than in 2010, up 193.2% for domestic bituminous coal and anthracite generation plants, 171.5% for domestic subbituminous coal, 16.7% for imported coal, but down 4% for coal gasification plants. Natural gas combined cycle plants generated a total of 50,734 million kwh in, a drop of 21.3% on Generation at plants that use fuel oil and oil-based products totalled 11,808 million kwh, a 0.8% increase on the 11,719 million kwh generated in (Table 2.20) and (Graph 2.21) Table Conventional thermal generation by ordinary regime companies (Million kwh) Graph Conventional thermal generation by type of plant. Ordinary regime. (Million kwh) Electricity Report Type of plant 2010 / 2010 (%) Domestic bituminious coal and anthracite 6,435 18, Domestic sub-bituminous coal 2,465 6, Imported coal 16,578 19, Natural gas, combined cycle 64,479 50, Fuel oil-natural gas Coal gasification and combined cycle 1,681 1, Fuel oil and other petroleum products 11,719 11, TOTAL 103, , DOMESTIC BITUMINOUS COAL AND ANTHRACITE DOMESTIC SUB-BITUMINOUS COAL IMPORTED COAL NATURAL GAS COMBINED CYCLE FUEL OIL-NATURAL GAS FUEL OIL AND OTHER PETROLEUM PRODUCTS COAL GASIFICATION AND COMBINED CYCLE