Iberdrola’s executive chair has warned power prices can jump by more than 25 per cent if Spain repeats the “big mistake” made by Germany of shutting down its nuclear power plants.
Ignacio Galán told the Financial Times the Spanish public would pay much higher prices and get a less reliable system if Madrid proceeded with plans to phase out all seven operating nuclear reactors in the country by 2035.
He said there was a need for “pragmatism” from policymakers, noting that the global debate was shifting in favour of prolonging the lifespan of nuclear energy plants or reopening decommissioned sites in the US, Belgium and Germany.
“Can we as Europeans be in a position to renounce those natural energy resources, just because of ideology? Or do we have to be pragmatic, like the Americans?” Galán said in an interview.
“The Spanish will pay for [closing nuclear plants] . . . If the nuclear power plants close, we have some analysis that the prices of retail will increase in the range of 25 [per cent] to 30 per cent.”
Decommissioning the nuclear fleet in Spain would cause an increase in the wholesale electricity price of about €37/MWh, causing electricity bills to soar by 23 per cent for the domestic sector and small and medium-sized businesses, and by 35 per cent for industry, according to PwC.
Governments in several countries, including the US, Japan and Belgium, have begun work to extend the lifespan of their nuclear reactor fleets to help meet rising electricity demand and energy security concerns linked to a reliance on imported oil and gas.
In October, the International Energy Agency revised up its forecasts for electricity demand, saying in its flagship World Energy Outlook report that usage in 2035 would be 6 per cent higher than was anticipated last year.
In Germany, Friedrich Merz and his Christian Democrats (CDU) — who won last month’s federal elections — have promised to explore whether it is possible to resurrect the three nuclear plants that were shut down in 2023.
The former operators of those facilities have reacted with little enthusiasm to the idea, warning that it is unlikely to be economically viable even if theoretically possible.
“Technically, everything is possible . . . but in the end, it’s a question, is it worth the effort?” said Markus Krebber, RWE chief executive, in an interview.
Spain is one of the few countries that is sticking to plans to close its nuclear plants. But the decision is generating a growing amount of discord as the closure of the first reactor — at the Almaraz plant — looms in 2027.
Station owners, led by Iberdrola, Naturgy and Endesa, decided on a graduated closure plan in 2019 when they were under pressure from a Socialist-led government, itself alert to public worries about safety and waste disposal.
But in the past two years, the heads of Iberdrola and Endesa have called publicly for a rethink and said the plants could be made to work longer.
Galan said shutting down Spain’s fleet of reactors would have a detrimental effect on grid reliability, with Iberdrola analysis showing the number of curtailments in power or potential blackouts could rise.
The Spanish government has resisted industry lobbying aimed at reversing the closure plans. It has argued that economic logic dictates that nuclear power make way for renewables because wind and solar power generate substantially more energy for the same cost.
Sara Aagesen, Spain’s energy minister, said last week that the government was in dialogue with the plant owners, but added: “The truth is that for the moment there is no news, no formal request from the companies to address the possibility of modifying the nuclear calendar.”
The Foro Nuclear, a lobby group based in Madrid representing plant owners, said the government needed to make the first move by cancelling ministerial closure orders it had issued for two reactors at Almarez.
Spain is already a global force in wind and solar, and its goal is to get 81 per cent of its electricity from renewables by 2030.
Additional reporting by Amanda Chu in Houston
