Madrid Spain’s coal-fired power plants are mostly located in structurally weak regions. If a power plant closes, it hits the surrounding communities hard, after all, energy production is often the most important economic factor.
The Spanish government is therefore granting the right to generate electricity that is fed into the grid instead of coal based electricity according to a new principle: the company that has the best plan for generating electricity from renewable sources to revitalize the former coal regions gets it the surcharge. So far, access to the network has been granted when a company has met the necessary technological criteria and passed the environmental assessment.
“Simply replacing the capacity of a coal-fired power plant to generate electricity with renewables is not necessarily good for employment in the region because jobs are lost,” explains Laura Martin Murillo. She heads the Institute for a Just Transformation, which reports to the Ministry of Ecological Transition. It was founded in 2020 and is intended to help make the transformation of the Spanish economy as tolerable as possible for all those affected.
Spain is much further ahead than Germany when it comes to phasing out coal: the 15 Spanish coal-fired power plants that used to be there are all closed or on the way. In order to prevent entire regions from becoming deserted, Murillo should ensure that new industries and jobs are created in the former power plant regions.
The first tender based on the new criteria took place in late 2021 in the northwestern province of Teruel. Twelve companies applied there for network access and submitted a plan for regional change. According to Spanish information, it was the first tender in Europe in which the regional benefit was decisive.
Energy companies are dependent on local residents as employees
The new tenders work according to a points system that varies depending on local conditions. In Teruel there were 25 and thus most of the 100 points to be awarded for job creation, 14 for the development of the local economy, eight for further training of the previous power plant employees and a further eight for plans for self-consumption of electricity from renewable sources. So a total of 55 points for economic and social criteria. The rest related to the specific technology of the renewables, the maturity of the project and the degree of environmental pollution.
The energy company Endesa, which previously operated the coal-fired power plant, was awarded the contract. However, the type of award was not entirely new for the group. “Wherever we close coal-fired power plants, we are developing a plan to save jobs and create new prospects for the region,” assures Rafael Gonzalez Sanchez, who heads Endesa’s generation business in the Iberian Peninsula.
“We’ve been in Teruel for 40 years and want to stay another 40 or 50 years with renewables – so it makes perfect sense to help the region benefit from it and to educate local residents about the new jobs that are being created there. “
In the remote coal regions, corporations like Endesa are dependent on the few local residents as employees. According to Endesa, it is training around 5,000 local residents on site so that they can help set up the plants for renewables.
After the end of the coal-fired power plant in Teruel, more jobs are being created than before
In the long term, 500 new jobs are to be created in the region – and thus significantly more than the 300 direct and indirect jobs that previously existed in the power plant. Of these, 300 jobs are accounted for by the systems for renewables: seven solar and just as many wind systems with a capacity of 1.8 gigawatts are planned.
To store excess energy, the company also produces green hydrogen and operates two storage facilities with batteries, as well as a factory for the production of electrolysers, which are needed for the production of hydrogen.
>> Read also: Germany fears disadvantages in the reform of the European electricity market
There are also big plans outside of the pure energy business: around 130 more jobs are to be created in initiatives that have nothing to do with Endesa’s business, but which the group is coordinating as part of its regional plan. For this, the suggestions of residents, mayors and local organizations were first listened to. Among other things, the result is a project in which more than 50,000 orphaned olive trees in the region are cared for again and the olives are harvested. “The olive harvest has a centuries-old tradition in the region, but has recently died out because many local residents have moved to the city,” explains Gonzalez Sanchez. All in all, Endesa has agreed to cooperate with more than 30 small and medium-sized companies.
Businesses must develop a plan to involve the local economy.
(Photo: Reuters)
This also includes the planned solar parks being used for agriculture at the same time: Herbs and grain are to be grown between the solar panels, and sheep farmers could graze their cattle there.
In technical jargon, this dual use is called “agrophotovoltaics”. Not only does it allow more intensive use of the area, it also generally promotes acceptance of the facilities by the residents.
Greenpeace: The companies that are responsible for the damage in the region benefit from the concept
In order to ensure that the regional change in Spain contains more than just nice promises, Endesa has to deposit several hundred million euros with the state. The company will only get the money back after six years if it has achieved the goals it has set for the region. “Otherwise we’ll keep the money and also deprive the group of network access,” says Murillo.
Environmentalists have something to gain from the government’s actions, but they also criticize it. In principle, Greenpeace welcomes the concept of just transformation. However, José Luis García, responsible for climate, energy and mobility at the environmental protection organization, criticizes the fact that the government negotiated it with the previous operators of the coal-fired power plants.
As a result, tenders favored precisely these operators because they know the region much better than new competitors. “As a result, the companies that are responsible for the damage in the region benefit from the transformation, while the new market for renewables remains closed to young companies.”
More: Climate scientists call for further pressure on the economy.