Spain Power Q1 2020
Spain's power sector growth will be driven almost exclusively by the expansion of its non-hydropowerrenewables capacity over our decade-long forecast period through to 2028. The imposition of carbon tariffs, havingcontributed significantly to the erosion of coal power's profitability, will motivate a rapid decline in coal-fired power over the near tomedium term, while long-term nuclear reactor retirements further weigh on total net growth in the country's power capacity andgeneration. Overall, we expect the majority of new opportunities for power sector investment in Spain to present themselves in thedevelopment of new solar and wind capacity, and in decommissioning the country's retiring nuclear reactors. However, we note thatthe government's move to cap returns on renewable power plants at 7.090% from 2020 to 2025 poses a downside risk to ourbullish renewables forecasts this quarter.
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