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Presentation at GILD international Business Club in Barcelona, May 2010. Study of the macroeconomic impact of renewable energy in Spain.
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Study of the macroeconomic impact of Renewable Energies in Spain
Piet Holtrop, Attorney at Law at APPA member firm HOLTROP S.L.P Transaction & Business Law,
Barcelona, May 21st 2010
01.- Introduction
¿What is APPA?
Founded in 1987, we are the only association in Spain which covers all renewable technologies on a national level.
APPA is comprised of 500 companies with interests in 10 different renewable technologies. The association defends an integral vision of renewable technology and is active in Spain and Europe.
APPA sections:
BiofuelsBiomassWindGeothermal (Low temp)Geothermal (High temp)
MarineMiniwindMinihidraulicSolar PhotovoltaicConcentrated Solar Power
02.- Study of the impact of renewable energies
What does this study do for us?
The study “Study of the macroeconomic impact of Renewable Energies in Spain”, carried out by Deloitte is the first study that evaluates the impact of clean energies in our society in a global way.
Some aspects of the study are:
» Economy» Employment» Environment» Supply risk» Human health» Price of electricity
03.- Impact of renewable energies in the economy (1)
Steepest growth rate
The sector grows faster than the rest of the Spanish economy.
3.3% 4.4%3.3%
8.7%4.0%
37.3%
-2.8% 0.5%
14.4%
-10%
0%
10%
20%
30%
40%
50%
2006 2007 2008
% G
row
th
Spain
Renewable Energies
Energy Sector
03.- Impact of renewable energies in the economy (2)
Contribution to the Spanish GDP (2008)
Direct: 4.805.000.000 €Indirect: 2.510.000.000 €
0,67% of GDP
4,876
5,3085,616
7,315
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2005 2006 2007 2008
GD
P in
re
al v
alu
es
(b
as
e 2
00
8)
-m
illio
n €
Direct Induced Total Impact
03.- Impact of renewable energies in the economy (3)
Contribution to the GDP per renewable technology
Wind – 48,1% Photovoltaic – 25,3% Biomass – 14,5% Concentrated Solar – 11% Minihidraulic – 7,8% Biofuels – 1,9% Miniwind – 0,7% Geothermal (H. T.) – 0,2% Geothermal (L. T.) – 0,1% Marine – 0,1%
Fiscal balance
The sector is a net fiscal contributor in all researched years:(2005-2008).
The fiscal balance was 404.000.000 euros in 2008
03.- Impact of renewable energies in the economy (4)
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
2005 2006 2007 2008
€n
om
ina
les
Subsidies
Local taxes, Property tax
Corporate Income Tax
Other taxes and fees
04.- Impact of renewable energies in the environment (1)
The best tool to avoid greenhouse gas emisions
The Sector avoided the emission of 23,6 million tonnes of CO2 in 2008, worth 499 million euros, 5,7% of all emissions in Spain. If the policy objectives had been met, this would
have been twice as much.
18,899,730 19,374,506
22,565,18423,649,572
336
218
501 499
0
100
200
300
400
500
600
700
800
900
1000
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
2005 2006 2007 2008
€in
no
min
al v
alu
es -
mil
lio
ns
CO
2eq
(to
nn
es)
05.- Impact of renewable energies in energy dependence (1)
89% of Spain’s energy is imported. In 2008 this amounted to 44 billion euros, 50% of Spain’s energy cost. A supply cut would have severe consequences.
The supply default of one country during one month would cause losses equivalent to 0,75% of GDP.
0.0%
0.2%
0.5%
1.0%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1 día 10 días 20 días 43 días
los
s in
te
rms
of
% o
f G
DP
05.- Impact of renewable energies in energy dependence (2)
Renewable energies avoided importation:
In 2008 10 million toe (tonne of oil equivalent) of fossil fuels were avoided:
1 toe is 7,4 boe (barrel of oil equivalent)
06.- Impact of renewable energies in the electricity price (1)
How is the price of electricity determined?The price of all the electricity is paid taking the production cost of the last MWh matched in the market (this is, the highest price), the existence of Renewable Energies reduces this impact by fixing lower marginal prices.
Renewable energies enter the market at zero price and thus reduce the final price.
06.- Impact of renewable energies in the electricity price (2)
Renewable energies reduce the price for generation of electricity.
The result obtained from this analysis is that the savings due to a lower marginal cost in the electricity market resulting from the existence of renewable energies amounted to 4,919 million € in 2008 (this represented a saving of 19.94 € per MWh acquired in the market)
4,574
2,255
3,698
4,919
0
1,000
2,000
3,000
4,000
5,000
6,000
2005 2006 2007 2008
in m
illi
on
€
06.- Impact of renewable energies in the electricity price (3)
¿Why pay feed in tariffs to renewables?
In 2008 the surplus is of 619 million euros
-910
-1,314-1,661
-2,605
837
1,5251,311
2,725
336218
501 499
-3000
-2000
-1000
0
1000
2000
3000
2005 2006 2007 2008
€in
no
min
al
va
lue
s -
mill
ion
s Incentives
Economic impact of avoiding fossil fuel imports
Economic impact of avoiding CO2 emissions
07.- Compliance with policy goals (1)
Spain is still far from meeting its goals:
Primary energy:
Electricidad:
Spain met its emission goals 2 years before planned
7,6% (2008) 12,1% (goal 2010)
20,4% (2008) 30,3% (goal 2010)
8.- Conclusions (3)
Renewable energies: the basics of production model are inverted:
The tendency of fossil fuel prices is upwards, because we are running out of oil, and exploration technology is becoming more
expensive. The cost of generation with renewable energy decreases every year, reaching economies of scale, and the
resources used are infinite.
An increasing demand of fossil fuel increases its price, an increasing demand of renewable energies reduces its price.
8.- Conclusions (4)
¿Are renewable energies expensive?
Data 2008:
2.605 M € (feed in tariff) 4.919 M € (generation price saving)
2.725 M € (Avoided import)
499 M € (avoided CO2 emisions )
404 M € (net fiscal balance)
132 M € (savings health expenses)
120.722 employees
315 M € (R&D investment)
1.227 M € (Net commercial balance)
Thank you for your attention
The study which is basis of this presentation will be available at:
www.appa.es