The Spanish Gas Market: Demand Trends Post Recession and Consequences for the Industry

In parallel with a flourishing economy, the natural gas industry in Spain was characterised by rapid consumption growth in the late 1990s and 2000s. Infrastructure and supplies were designed to meet the needs of a gas market growing at double digit rates each year. This high growth rate – for a European gas market – was expected to continue until at least the mid-2010s. By 2011, this outlook was replaced by a more pessimistic one. Firstly, the country’s economy was hit hard by the global recession and GDP growth recovered later than average for Europe. Secondly, the utilisation of Spain’s CCGTs dropped from 52% in 2008 to only 33% in 2010 as a result of an increasing use of renewable energy – especially wind and hydropower – to produce electricity. This raises the question of whether the expectation of gas demand in the Spanish power sector is ever going to materialise. The objective of this paper is to investigate the state of the Spanish gas market and its potential for growth. Will the negative impacts on the gas market be short lived or is there a need to review the scenarios to incorporate new dynamics relative to economic growth and renewable energy use?  What will the consequence be of these changes on the gas industry?

By: Anouk Honoré

Latest Tweets from @OxfordEnergy

  • OIES's @thierry_bros shares his views with @ICIS_energy "... investors need low cost LNG to guarantee profitability… https://t.co/eFnRD0ovAa

    November 14th

  • Russia’s gas pivot to Asia https://t.co/FIQFDGJnGR

    November 14th

  • As Denmark is considering its decision in respect of #NordStream2 permit, @katyafimava made a presentation about th… https://t.co/9ePnZ2SzST

    November 13th

Sign up for our Newsletter

Register your email address here and we will send you notification of new publications, comment, articles etc. automatically.