MADRID, Jan 4 (Reuters) - The amount of electricity consumed in Spain fell 2.3% for the second year in a row in 2023, raising fears of a supply surplus as the renewable energy sector grows faster than fossil and nuclear sources.

With renewables breaking records and the government planning to massively increase their contribution to the energy mix in the coming years, low electricity demand is a growing problem for the renewable industry.

Spanish electricity demand stood at 244,686 gigawatt hours (GWh) last year, following a 2.3% drop in 2022, according to provisional data released Thursday by grid operator Red Eléctrica.

The decline was due to falling demand from Spanish industrial consumers, who are still suffering the effects of the energy crisis.

The industry lobby group APPA Renovables called on Wednesday for policies to support electricity consumption, such as encouraging the adoption of electric vehicles.

Renewable sources, such as wind and solar, produced a record amount of energy and accounted for an unprecedented 50.4% of the electricity generated in Spain last year, according to data from Red Eléctrica.

Wind farms replaced gas-fired plants as the country's main source of electricity, covering more than 23% of demand.

Gas-fired power plants, known as combined cycle plants, accounted for approximately 17% of the electricity consumed in the country, down sharply from the previous year, when their contribution was almost 25%.

Electricity demand is just one of the problems threatening to affect the deployment of renewables in Spain at a time when the country needs to accelerate it to meet its ambitious green targets.

Low wholesale electricity prices are affecting profitability, APPA warned, and utilities such as Endesa and Naturgy pointed to a slowdown in renewables development in the face of high interest rates and rising debt costs.

(Reporting by Pietro Lombardi; editing by Jan Harvey; Spanish editing by Javi West Larrañaga)