Spain’s hydropower plants are set to end the summer at their lowest levels in three decades, adding to pressure on electricity prices as Europe’s energy crisis widens.

Hydroelectric capacity was 36.9% in the week to August 23, the lowest since 1995, according to data released by the Energy Ministry. Inventories are also well below the 10-year median.

Water cascades over the Sau dam in Vilanova de Sau, Spain, Saturday, Aug. 20, 2022. The continent’s rivers are evaporating amid a dry summer that has set heat records across Europe.

The blow to hydropower, which accounts for about 16% of Spain’s generating capacity, came as wind farms were hit by below-average winds and solar production was hampered by storms in the Sahara and dry weather that blanketed large parts of the country. dust.

While the crackdown on renewables will force power generators to increase their reliance on gas as Russia squeezes flows to Europe, Spanish consumers will not face the same price shocks as their counterparts in the UK and Germany. This is because of the so-called Iberian exemption, which gives Spain and Portugal a regulatory exemption that allows them to decouple the wholesale price of electricity from gas by capping the price of fossil fuels.

Total hydroelectric generation fell 44% to 18,230 gigawatt-hours last year, according to data released Tuesday by Red Electrica Corp., the Spanish power transmission operator.

However, according to a recent report from the European Commission, the outlook for Spanish hydropower will not improve in the coming months.

“Although near-normal conditions are forecast from August to October 2022,” following a long dry spell in recent months, “this may not be enough to fully recover from deficits accumulated over more than six months,” the report said. “Very drier than normal weather conditions are only forecast for western Spain, eastern Portugal and along the Croatian coast.”

Major Spanish hydropower producers include Iberdrola SA, Endesa SA and Repsol SA.

© 2022 Bloomberg

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