The Spanish economy enjoyed a growth cycle that lasted until 2008, when the global financial crisis hit. This left Spain exposed, since recent economic growth had depended on a housing boom that was itself driven by the availability of cheap credit. The country must now deal with the impacts of the crisis and a very high unemployment rate of almost 20 %.
Primary energy consumption has grown at an average rate of almost 1 % per year over the last decade to reach 188.8 Mtce in 2010. The country is highly dependent on imported oil and natural gas. The only significant indigenous energy resource that Spain possesses is coal, totalling 4,500 million tonnes, of which accessible reserves total 1,156 million tonnes.
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 Leon-Palencia are also of a low calorific value, although anthracite seams are also present. Coal in the Hulas de Leon mining area has a high calorific value and low volatile matter, making its extraction more economic. The hard coal basin in Puertollano near Córdoba 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 in opencast mines. However, the high sulphur content of this coal (4 % to 6 %) made it less attractive for use at power plants, but now these have been equipped with flue gas desulphurisation.
Hard coal mines are located in the region of Castilla y León, especially Palencia, producing 3.1 million tonnes – almost half of the country’s output. In Asturias, 2.4 million tonnes were produced. Mining is also very important in Puertollano near Córdoba with an output of 0.5 million tonnes and finally in the northern part of the country at Teruel and Aragon, where 2.5 million tonnes of sub-bituminous coal were produced. Over 60 % of the hard coal is mined in opencast mines, making indigenous hard coal competitive compared with imported coal. CARBUNION, the Spanish confederation of coal producers, is therefore seeking to maintain indigenous coal production, even after the expiry of state aid in 2018, as required by Council Decision 2010/787/EU.
Due to weak electricity demand from households and an increase in the share of renewables, coal production in 2010 was lower than expected. In 2010, the share of domestic hard coal in power generation was just 9 %, making Spain heavily dependent on imported energy, including 12.8 million tonnes of coal. In this context, a Royal Decree was published in 2010 to maintain support for indigenous hard coal production via an obligation on utility companies. The Decree was heavily contested by several power generators. Nevertheless, Spain has been for many years the country with least indigenous primary energy in its energy mix, depending on imports for around 85 % of its energy needs (compared with the average EU of 55 %). This places a burden on the Spanish economy by increasing its trade deficit and foreign indebtedness.
In order to secure the country’s energy needs, it was decided to build power interconnectors with France, but these are not progressing at the moment and the current situation is that Spain has become an energy island, struggling to meet its electricity needs. Indigenous hard coal is seen as a solution, to maintain a certain level of independence. At the same time, Spanish power plant operators have made large investments to upgrade their equipment and significantly reduce the environmental impacts of coal combustion.
Spanish power plant operators have two major objectives to meet their environmental obligations. On the one hand, the reduction of sulphur dioxide (SO2), oxides of nitrogen (NOX) and particulate emissions, which is being addressed through the progressive introduction of technical measures. On the other hand, the reduction of carbon dioxide (CO2) emissions presents another challenge. In Spain, coal combustion currently generates 15% of CO2 emissions, while the transport sector emits more than one third of CO2 emissions.
Several pilot projects on "zero emissions" and "clean coal" combustion are underway or planned. The Fundación Ciudad de la Energía (CIUDEN or Energy City Foundation), in cooperation with the central government and with support from ENDESA, owner of the Compostilla power station near León, is managing one of the projects, benefitting from EU funding under the European Energy Programme for Recovery. The project aims to demonstrate the storage of 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.
At the end of 2007, Spain’s last lignite mines located in Galicia on the north-west of the Iberian Peninsula had to be closed.