Spain is a world leader in the field of renewable energies. Being one of the European nations with the must sunshine, it is heading towards the greater solar generation and is known as the second-placed country in Europe in terms of wind power generation.
Not just the country, but Spanish companies also have a reputed name in being leading positions on the world rankings for different forms of renewable energy. In this crowd,
Soto Solar has been making full efforts to optimize these opportunities and contribute to country’s energy transformation.
Being a developer, investor and IPP focusing on large-scale and self-consumption solar PV projects, it has been helping to accelerate the energy transition, sustainability, and digitalization in Europe. Through development and investment of photovoltaic solar projects in Spain, it has targeted a growth ambition of installed solar PV capacity of 2.5 GW for the next five years, says Jaime Vazquez, Director of PPA Origination and Structured Finance at Soto Solar.
Over the last few years, Jaime has obtained more than 2GW in Secured Tariffs through PPAs and Tenders and raised over 250m Euro Senior Debt in Project Finance.
Though renewable energy is the future of energy industry globally, the challenge is how to transition into a fully renewable energy scenario. In the past, it was regarded as expensive and non-essential as a mainstream energy source, however, over the last 10 years, there has been a technical and economic breakthrough for wind and especially solar PV.
There is no limitation to wind and solar PV, as there are other renewable options like thermo-solar, biomass, geothermal, waves and tidal, which are a great compliment. At a time when there is an international pressure due to the COVID-19 pandemic and the current Russian war in Ukraine, there are also concerns including the value chain, electricity and raw material prices, transport and shipping and recycling. “We just need to find the missing pieces of the energy transition puzzle,” Jaime remarks.
He is clear that storage is the major factor. Since production of energy is readily available through solar and wind when the sun shines or the wind blows, consumers want to have electricity available 24/7. Amid such, storage should close the gap between the renewable production variability and the demand requirement for dispatchability, he remarks, adding that he is considering adding up storage in their projects in Spain.
Ideally, it is suggested that all generation should be produced from renewable sources, which combined with storage would provide electricity when needed. “There is not enough focus on energy storage, where most of the efforts should concentrate,” he remarked. Over the next 10 years, Jaime is confident that storage (in particular, battery storage) will experience major technical, economic, and regulatory breakthroughs. For that, efforts should be made on various aspects including regulation to create a stable framework.
The industry insiders are clear that the existing nuclear plants should be extended until the fully renewables target, with sufficient storage to make it dispatchable, can be achieved.
Jaime, whose company is focused on Spain, shared that the South of Europe (Spain, Portugal, Italy, and Greece) has a potential of becoming solar energy hubs, while the North of Europe (UK, Denmark, Netherlands, Poland, Sweden, and Finland), could become wind energy hubs.
Besides solar and wind, the potential of hydrogen cannot be undermined, but first, misconceptions should be cleared off. “Hydrogen would be an energy source only if we could mine it. It is not a source of energy, but rather a form of energy storage or an energy vector. Hydrogen is a very good complement to renewable energy sources and can play a big part in curbing carbon emissions.”
There is an immense potential of usage for high temperature ovens and large engines such as ships, trains or planes, which can play a relevant role in decarbonization or areas which can be difficult to electrify.
Unlocking all the potentials, Soto Solar, a young company but with very experienced and knowledgeable staff, operates a business model encompassing C&I self-consumption, photovoltaic plants, with a comprehensive model from project development to financing, construction oversight, final execution, and long-term operation. “We are flexible in different stages of development, but prefer Ready-To-Build projects, to complement our development activities”, Jaime mentions about the works that they have been executing.
The company has started the construction of two PV plants for self-consumption in Valencia. One of them is the largest rooftop self-consumption PPA to-date in Spain. Besides, it is also developing Erasmo, a PV plant in Spain with 1.2GW capacity, which is in early stage. It would be the largest plant in Spain, and in Europe.
Located in Castilla la Mancha, the project has a forecasted production of more than 2,000 kWh/kWp. For this, it has already secured the land, completed pre-environment studies, and have received support from local communities and the regional government. It plans to include significant battery storage and hydrolyzers to produce green hydrogen.
“Regarding self-consumption, we don’t do residential, but the target is to execute 500 MW in next 2-3 years for Commercial and Industrial self-consumption projects. For large-scale, we want to build at least another 1GW, apart from Erasmo, so, the total capacity would be 2GW.”
Not limited to prospects and plans, there are also enough challenges in the sector like to find good projects with suitable land, grid connection, support from local communities and authorities, lengthy environmental and permitting processes among others.
In terms of grid connection, the new process introduced in Spain mentions that permits need to specify plant location and need to meet certain development milestones to avoid expiration, including connection within 5 years. So, there is now the risk of losing the connection bond and the project, which aims to end speculation, he explains.
To be noted, a new auction process has been put in place in Spain, which says that projects must submit their proposals in terms of connection date, job creation, local value chain, social benefits, and environmental impact. Only the best scoring projects will be granted connection capacity after evaluation.
“In principle, the new policy is good, but the implementation has taken too long (so far, one year for new process plus another year for transmission auctions), creating connection bottlenecks”
Jaime clarifies. However, he is optimistic that things will get better.
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