We expect a big transformation in the Iberian electricity sector in which most of the traditional generation assets will lose relevance or disappear while a new generation model will emerge. In the conventional generation sector, coal plants might see their output halved by 2021 for environmental reasons and nuclear plants could be phased out by 2024 (on average) for political reasons. Meanwhile, CCGTs will gain importance as backup and the marginal technology in an electricity system that should show a declining demand evolution. We believe a new generation model will develop, driven by technology improvements in which we believe solar PV and battery storage will change the market landscape.
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