The CEO of SpaceX and Tesla, Elon Musk, argues that "Spain should make a massive deployment of solar energy". This is what he wrote on his official Twitter account, a social network in which he has just become main shareholder. Musk believes that Spain could become the supplier of this type of energy "for all of Europe." His appreciation comes at a time when the conflict in Ukraine has accentuated the upward pace of energy prices, specifically oil and gas derivatives, and in which there is even fear of a possible future shortage as a consequence of the sanctions imposed on Russia.
We’re already implementing most ambitious plan towards efficient & sustainable energy system. All sectors on board. Maximizing opportunities, digitalization and value chain for a long lasting success. Time is now. Let's get it right. Come and see.We welcome investors in Spain. https://t.co/QVPnxaQHui— Pedro Sánchez (@sanchezcastejon) April 5, 2022
At the moment, new energy measures are being debated within the European Union (EU), since the suppression of oil imports from Russia is considered an option, although it would be more difficult to eliminate Russian gas, a supply of which several countries of the European bloc depend on: the main example being Germany.
Musk's diversified businesses also include solar energy and batteries for large-scale, self-consumption energy storage. However, the entrepreneur's commitment is met with a hurdle: the minimal grid interconnection that the Iberian Peninsula has with the rest of the continent in terms of energy.
The billionaire made his consideration about the Spanish possibilities in terms of solar energy in response to a publication of a tech portal that outlined the approval of the Government of Spain of a new Strategic Project for Economic Recovery and Transformation (PERTE in Spanish); on this occasion to prop up the microchip and semiconductor industry with 11,000 million euros.
The President of the Government of Spain, Mr. Pedro Sánchez, responded by the same means to Musk: "We are already implementing the most ambitious plan towards an efficient and sustainable energy system. All sectors on board. Maximizing opportunities, digitization and the value chain for lasting success. The time is now. Let's do it right. Come and see", wrote the president, who addressed a message to the businessman: "We welcome investors in Spain.
At the moment, the Government of Spain is trying to solve the problem of high electricity prices with a plan presented in Brussels, together with Portugal, which aims to take advantage of the condition of both countries as "energy islands" with respect to the European bloc. President Pedro Sánchez and Portuguese Prime Minister, António Costa, have presented a plan whose main means is to cap the price of gas in order to lower the bill of domestic and industrial consumers.
Electricity pricing in the European market works by assigning all energy the price of the last to enter the daily auction - generally gas - which is more expensive than the rest. So the latter determines the price of the rest of the technologies. This system is particularly detrimental to Spain and Portugal: most of its production comes from nuclear, hydraulic and renewable energy, whose price is around 20-30 euros per megawatt hour. Gas, which represents a small percentage of their national consumption, has been paid in international markets at more than 200 euros since the end of December 2021.
In this context, the Iberian proposal aims to limit the price of gas to 30 euros per megawatt hour until the end of December this year, so that the rest of the energy would also be paid at that price. This would introduce a double matching system: the first, in which all electricity would be paid at that price, and a second, where the adjustment would be introduced and the gas would be paid above that cost.
At the moment the Portuguese-Spanish proposal is being studied in Brussels, although the answer is expected to arrive in a few days. If it is affirmative, the third Vice President and Minister for the Ecological Transition, Teresa Ribera, assures that it could be implemented within three to four weeks. Will Tesla help these Spanish-Portuguese efforts, the same way it is already helping Australia - with its Solar and Megapack - and many other cities in the US and around the world? Only time will tell, but we will be able to see how it develops in the following weeks.
All images courtesy of Tesla Inc.
Nico Caballero is the VP of Finance of Cogency Power, specializing in solar energy. He also holds a Diploma in Electric Cars from Delft University of Technology in the Netherlands, and enjoys doing research about Tesla and EV batteries. He can be reached at @NicoTorqueNews on Twitter. Nico covers Tesla and electric vehicle latest happenings at Torque News.