Page 84 - economic report 2021

In 2021, national electricity production In 2021, electricity product on fell 27.9%,
(calculated in 110 kV bars) saw a year-on- a similar rate to the increase seen in 2020.
year decrease of 27.9%, offsetting the 28.3%
increase of 2020. The 2021 decline can be
explained by the major fall in hydroelectric power (-35%), the lowest figure since 2012. On the
other hand, solar energy production increased 30%, reaching the highest figure in the historical
series. Thermal power generation increased at a slower rate, 3.5%. Despite these trends, only
hydroelectric power is relatively important as an energy source, as it represents 15% of total
energy demand in the Principality; thermal power represents only 5% and solar power only 0.5%.
The hydroelectric power station of FEDA (Andorran electricity company), which generated nearly
80,000 MWh, is still the main source of national energy, 100% renewable. Although the volume of
electricity generated in 2021 was lower than in 2020, the contribution from this infrastructure is

Box 10.1
ENVIRONMENTAL LEGISLATION

Law 21/2018, of 13 September, on the Energy Change sets the goal for national production to cover
Transition and Climate Change (Litecc), establishes the at least 33% of demand and for the percentage to
bases for the future of energy in Andorra and defines reach 50% by 2050. According to the Government,
climate change goals. More recently, on 23 January if the new renewable electricity production plants
2020, the General Council passed a resolution authorised and developed throughout 2022 are
recognising the climate crisis and declaring a state of considered, Andorra will be able to produce 26% of
climate and environmental emergency, entrusting the its own electricity consumption, more than half the
Government with various relevant actions. target, and over the following years that percentage
82 will continue to grow thanks to new infrastructures,
In response to the commitments and the above- such as the wind farm that FEDA is studying building.
mentioned law, the 2020-2050 National Energy Achievement of the goal will also be helped through
Strategy to combat climate change was passed in solar panels installations on privately-owned land and
February 2021, the roadmap for Andorra to tackle roofs, an investment that has increased exponentially
climate change and increase the country’s resilience thanks to the grants and subsidies in the Renova Plan.
to its impacts. As for emissions, its goal is carbon
neutrality by 2050, and to achieve this target, the As for taxation, the amendment of the Law on
strategy also sets the reduction of the carbon footprint special taxes passed in July 2021 set the date for
in the sectors that emit these gases in this country. implementation of the green tax on 1 January 2022.
The Andorran economy: developments in the main sectors | X. Industry
The green tax is a targeted tax form intended to reduce,
Equally, in parallel with participation at the Climate mitigate and repair the effects of CO2 emissions. The
Summit in Glasgow, held in November 2021, Andorra revenue will be destined for financing a green fund
started the process to join the coalition of countries to make public transport accessible to everyone and
seeking carbon neutrality for 2050 and fulfil the improve home comfort. The green tax is indirect by
commitments of the Paris Agreement. nature and imposed on imports of hydrocarbons.
If the distribution sector decides to wholly pass on
With this goal, in January 2022, the Government the green tax to the consumer, the increase in the
passed the regulations on electricity production final price will be an average of three cents per litre
through government concessions, to streamline the of petrol or diesel. Within the context of the major
granting of concessions to stakeholders in the sector increase in fuel prices in recent months, temporary
to incentivise the installation of hydroelectric and solar partial reductions of the special tax on hydrocarbons
power plants. These regulations allow the construction were approved, which can be claimed by vehicles
and exploitation, by the private sector, of electricity used for taxi services, goods transport vehicles with
generating plants using renewable sources connected a total loaded weight of between 3,500kg – 7,500kg,
to the national electricity network. Remember that and special self-propelled vehicles (tractors) that
Law 21/2018 on the Energy Transition and Climate consume diesel.