Through Spain’s National Renewable Energy Action Plan (NREAP), filed last June, the central government aims for 38GW, surpassing the 20% renewable energy target for 2020 set by the EU. Nevertheless, the plan shaves 2GW off a previous unofficial 40GW installed capacity target to that year, part of a cross-party pact, known as the Zurbano pact, set out in early 2010.
This downward adjustment affects only offshore wind, now trimmed to 3GW instead of 5GW, with stringent regulation meaning the first offshore plant may not start building until 2014. Overall, this represents a 5% drop on the wind industry’s previous overall installed capacity outlook to 2020.
It also means the industry must add 18GW capacity by 2020, in addition to the 20.6GW online by last year. That leaves growth required of less than 1.8GW/year. The figure is well below industry capacity, given that annual performance reached as high as 3.52GW — in 2007. It is also less than the annual new installed capacity rate over the past five years, which averages 2.13GW.
So, although the NREAP sets a target higher than the EU set in 2009 for renewables to cover 22.7% of the final energy mix (heating, transport, electricity and all other energy areas), the Spanish wind association AEE says that wind’s target is less ambitious than it should be.
Views on the ground are less diplomatic. Echoing opinions from many insiders, one AEE member calls the NREAP "another slap in the face for wind". Industry minister Miguel Sebastian already hit wind with a 6.4GW cap on new capacity for 2009-12 — just 1.6GW annually. Late last year, Sebastian also introduced a regulation that capped, for the first time, annual production from any single wind plant. This cap is at 29% of the stated nameplate capacity that a wind farm actually delivers over the course of a year.
Currently, AEE is preparing to negotiate that new regulation. AEE president José Donoso insists on the need for a strong signal on the new pay mechanism for wind. "Developing a wind project to completion requires seven or eight years, not two or three; we need longer-term visibility to keep investors on board," he says.
Antonio Hernández, director general of the industry ministry’s energy department, argues that the NREAP is an inviolable promise before the European Commission. "What stronger guarantee for the future could a sector want?" he asks. Yet AEE says the factory closures and lay-offs from major firms like Gamesa, Vestas, LM and GE, with more than 10,000 jobs lost, are a result of the cap on new capacity and lack of visibility ahead.
Currently, wind power receives a €38/MWh inflation-linked production incentive, in addition to the price it receives on the wholesale electricity market. AEE wants to maintain the mechanism and the rate.
Meanwhile, in terms of energy production, the national plan envisages 78.26TWh for wind in 2020, covering 20.9% of electricity demand. This is a reduction on the Zurbano pact electricity target.
Still the NREAP retains the broader target of 38-40% of electricity from all renewables by 2020, despite the cut in the offshore objective. This is because nascent solar, photovoltaic and thermoelectric power sectors are producing more than expected, Hernández explains. The renewables target is well within sight, with last year’s high winds and heavy rainfall contributing to renewables covering 5% of national electricity consumption in 2010.
Managing the flow
Wind has consolidated its position as Spain’s third-biggest generating technology behind gas and nuclear — no easy task given that Spain has few energy interconnectors to transfer capacity to the rest of Europe. This means that balancing the system against variable electricity demand and wind generation has to be carried out mainly internally on the grid. Spain claims that it has led the global industry in grid integration. The sector now has 100% of installed capacity operating under real-time monitoring and emergency override control by system operator REE. Wind prediction has been in place for a decade and nearly all online capacity can now ride out unpredictable and sporadic voltage dips in local networks, instead of tripping offline.
However, in order to admit extra wind capacity, the NREAP requires the extension of interconnection capacity to 10GW. Completion of a 2GW line with France is expected in 2014 with an agreement to build another similar line after that. That leaves 3GW, mainly resting on negotiations with power-thirsty Morocco.
It only remains to be seen whether the cash-strapped central government, increasingly bowing to the renewables caution of industry minister Miguel Sebastian, can keep up the political will with a dependable new pay scheme for wind generation.