Spain

Spain’s primary energy consumption was 178.1 Mtce in 2012, 13.3 % less than its peak in 2007. The economic crisis has been particularly harsh in Spain and the government has been forced to introduce many austerity measures which have had a direct impact on the coal industry. At the same time, the country is highly dependent on imported oil and natural gas. It has an overall import dependence of 76.4 %, well above the EU average of 53.8 %. This places a burden on the Spanish economy by increasing its trade deficit and foreign indebtedness. The only significant indigenous energy resource that Spain possesses is coal, totalling 4 500 million tonnes, including accessible reserves of 1 156 million tonnes. In 2012, coal met 12.2 % of the country’s energy demand.

The hard coal deposits in Asturias are located in the Nalón valley and are of a low calorific value. Nevertheless, in the past they were Spain’s biggest source of coal. Today, high extraction costs have led to the gradual closure of mines. The deposits at León - Palencia are also of a low calorific value, although some anthracite seams are present. Coal in the Astur - Leonesa basin north of La Robla in León, where anthracite is mined by HULLERA VASCO – LEONESA and CARBONAR, has a high calorific value (5 500 kcal / kg) and low volatile matter, making its extraction more economic. The hard coal basin at Puertollano has enough reserves to keep the current opencast mine owned by ENDESA in operation for several decades. Teruel boasts the largest Spanish sub - bituminous hard coal reserves, of which some 200 million tonnes can be extracted by opencast mining. The high sulphur content of this coal (4 % to 6 %) made it less attractive for use at power plants in the past, before they were fitted with flue gas desulphurisation.

Spain has one of the most dynamic electricity markets in Europe. There is fierce competition between coal – fired and natural gas - fired power generation for the market that remains after nuclear, hydro and must - run renewables have supplied. Hydro output can vary significantly from one year to the next and, with a system capacity margin of 136 %, there is plenty of room for switching between energy sources. During 2012, the Spanish government introduced many new measures, including taxes, into the power generation sector which will significantly reduce earnings. The aim is to reduce the growing deficit resulting from generous renewable tariffs which amounted to € 8 billion in 2012. In fact, the government put a halt on any subsidises for new renewable projects in January 2012. In addition, a new electricity sector law moved through the Spanish parliament during 2013 and will mean deep cuts to the subsidies paid to renewable projects that are already installed in order to reduce the deficit.

Hard coal

Hard coal mines are located in the region of Castilla y León, especially in the León and Palencia provinces, producing 1.6 million tonnes in 2012. Also in northern Spain, 1.8 million tonnes were produced in Asturias. Mining is very important at Puertollano in the Ciudad Real province south of Madrid with an output of 0.5 million tonnes. Finally, in the eastern part of the country in the Teruel province of Aragon, 2.2 million tonnes of sub - bituminous coal were produced in 2012. In all, there are fourteen active coal mining companies. Over 60 % of the hard coal is mined in opencast mines, making indigenous hard coal competitive compared with imported coal. CARBUNIÓN, the Spanish confederation of coal producers, is seeking to maintain such competitive indigenous coal production, even after the expiry of state aid in 2018 as required by Council Decision 2010 / 787 / EU, and, in this respect, is supported by the Spanish government. Nevertheless, in 2012, the government dramatically reduced subsidies paid to coal mining companies, by 63 %. Over the course of two years, state aid to the coal mining sector will have been reduced by over 80 %, from € 300 million in 2011 to € 55 million in 2013. There are now coal mines operating without state aid and these represent the first element of a competitive mining industry in Spain. In September 2013, the Spanish government reiterated in parliament that it is seeking from the European Commission a review of Council Decision 2010 / 787/ EU on state aid to facilitate the closure of uncompetitive coal mines. Specifically, the government wants this review to allow mines that have achieved competitiveness to continue to produce coal after 2018 and not to have to repay past state aid.

Coal demand in 2012 was very strong and was met by a combination of 6.1 million tonnes of domestic production and 21.4 million tonnes of imports. Royal Decrees 134 / 2010 and 1221 / 2010 took effect in 2011 and helped to maintain demand for indigenous hard coal via an off – take obligation on utility companies of up to 23.4 TWh per year from the ten coal units still burning local coal. Coal – fired generation increased 24.4 % to 55.9 TWh in 2012 from 11.2 GW of installed capacity, covering 19 % of overall electricity production. Renewables, including hydro, took a 30 % share, natural gas 25 %, nuclear 21 % and oil 5 %.

Spanish coal - fired power plant operators have two major objectives to meet their environmental obligations. On the one hand, the reduction of sulphur dioxide, oxides of nitrogen and particulate emissions are being addressed through the progressive introduction of technical measures. Almost all plants are now fully compliant with the Large Combustion Plants Directive. On the other hand, the reduction of carbon dioxide (CO2) emissions presents another challenge. In Spain, coal combustion currently generates 18.5 % of CO2 emissions, while the transport sector emits more than one third of CO2 emissions.

Several projects are well underway to address clean coal combustion and dramatically reduce CO2 emissions. The Fundación Ciudad de la Energía (CIUDEN), in co – operation with the central government, is managing one of these projects, having benefitted from EU funding under the European Energy Programme for Recovery. The project is a very large scale pilot plant that is already demonstrating oxy - fuel combustion in two types of boiler. In addition, it aims to demonstrate the storage of the captured CO2 by injecting it 800 metres underground into a deep saline aquifer. It is foreseen that all Spanish power plants will be CO2 capture - ready by 2020 and that transport and storage options will be in place by the same date. These very challenging goals should allow the continued use of indigenous coal at reasonable prices at least until 2050, and so contribute to Spain’s energy supply security.

Lignite

At the end of 2007, Spain’s last lignite mines located in Galicia on the north - west of the Iberian Peninsula were closed. Lignite reserves of 210 million tonnes remain.

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Spain
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