Iberian power demand rises 2% in 2021 as restrictions ease

Iberian power demand rose 2% in 2021 as restrictions eased in both Spain and Portugal and economic activity restarted in the second half of the year, according to data published by grid operators Jan. 4.

In Spain, annual power demand rose 3% year on year to 256 TWh, REE reported, noting that the total was still 3% below 2019 prior to the pandemic.

In Portugal, end-user demand was up 1% to 49 TWh, REN data showed, also 3% below 2019.

Both countries retained restrictions on a range of economic activity with tourism-related volumes affected, flattening seasonal demand spikes.

However, industrial activity was resilient and both countries showed strong data to October with the adjusted industrial turnover indexes up 10% in Spain and 12% in Portugal.

The biggest changes in the power market were on the supply side in a year marked by record high spot prices.

In Spain, wind generation surpassed nuclear to become the largest generating source for only the second time, reaching a 24% share of supply in 2021.

During December, wind power output reached a record peak coverage of 82% of demand Dec. 8 while also reaching a peak output of 20.1 GW and a daily record high of 430 GWh.

Wind additions are likely to keep trickling higher throughout 2022 with several large-scale projects moving forward as well as capacity awarded in government auctions.

Other renewables are also likely to continue adding capacity in the short term.

Spain announced a new auction Dec. 30 that will aim to assign 500 MW of new capacity in April, consisting of 200 MW solar CSP, 140 MW distributed solar PV, 140 MW biomass and 20 MW of other techs.

Portugal transition

In neighboring Portugal, wind also topped the supply stack with a 25% share of generation.

While hydro and gas-fired generation receded year on year, the principal change was the final phase-out of coal-fired capacity, with the 618 MW Pego plant closing in November as its operating license expired, following the closure in Q1 of the 1.2 GW Sines plant.

The shortfall was covered by a 226% jump in net power imports from Spain, which itself imported from France for much of 2021.

Portugal's supply side was also affected at the year end by the halting of gas flows through the Maghreb gas pipeline from Algeria via Morocco and Spain in which Portugal's Galp had a 23% stake.

Overall, Portugal reduced its 2021 gas demand by 5% with gas-to-power demand down 10%.

SPAIN 2021 POWER SUPPLY, DEMAND BALANCE*

* Mainland and Balearic islands only

Source; REE

PORTUGAL 2021 POWER SUPPLY, DEMAND BALANCE

Source: REN