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Spain

Spain

Special Report Europe 2020 - Maturing Markets - Expected to keep rolling along - Spanish market hits make or break time on policy

Following Spain's roaring wind development performance over the past five years, averaging at over 2 GW installed annually, the industry is geared up to reach 40 GW cumulative capacity by 2020, says national wind association Asociaci—n Empresarial E—lica. By that year, under the EU renewable energy directive, Spain must source 20% of its primary energy from renewables, up from just over 8% in 2005.

Spain's wind industry is still rolling, but new policy is being drawn up and the government is keeping quiet.

Following Spain's roaring wind development performance over the past five years, averaging at over 2 GW installed annually, the industry is geared up to reach 40 GW cumulative capacity by 2020, says national wind association Asociacion Empresarial Eolica (AEE). By that year, under the EU renewable energy directive, Spain must source 20% of its primary energy from renewables, up from just over 8% in 2005. To achieve that, the government calculates 41.8% of electricity must come from renewables. The 40 GW of wind plant, generating 85 TWh a year, will meet 22.37% of the 38 TWh forecast for demand.

To that end, Spain's wind industry now has to add over 23 GW of new capacity over the next 11 years, adding to the 16.7 GW online at the end of 2008. "If any industry can do it, ours can," says AEE's Jose Donoso. Spain is home to two of the world's top ten turbine manufacturers: Gamesa and Acciona Windpower. The world's top manufacturer, Vestas, of Denmark, operates two factories in Spain. The country is also the base for the headquarters of four of the world's top five wind farm operators: Iberdrola Renovables, Acciona, EDP Renovaveis and Endesa. "The current credit crunch requires such formidable corporate strength committed to long-term investment," says Donoso.

The 40 GW wind goal is an unofficial target as yet, deriving from the combined wind targets of Spain's 17 regional governments. The only legally binding target is the 20.15 GW objective to 2010, fixed four years ago as part of the renewable energy plan, Plan de Energias Renovables (PER). This is likely to be achieved this year to schedule (Windpower Monthly, March 2009). At that point, under the terms of the original plan, the production incentive paid to wind producers, which they receive in addition to the wholesale price for electricity, is to be reviewed. The national government, meanwhile, approved a higher wind target, for 29 GW by 2016, last year as part of its investment plan in new electricity and gas infrastructures. It is currently drafting a new PER in line with that target, as well as Spain's first national renewable energy law. Whether the target shifts to 40 GW any time soon remains to be seen.

Even so, the national transmission system operator, (TSO) Red Electrica de Espana (REE) - long concerned about balancing wind power fluctuations in Spain's poorly interconnected system - has begun studying the viability of accommodating 40 GW of wind capacity. "REE is now looking for solutions to national commitments and not merely saying challenges are technically insurmountable," says REE president Luis Atienza. Moving to a 40 GW target, he says, requires significantly accelerating efforts to double interconnection capacity with France to at least 6 GW. This will help balance non-scheduled high wind generation, he says, which is becoming increasingly vital. Wind power spot penetration has topped the 40% mark several times recently.

Donoso says the other key requirement is a concrete show of support for wind from the government, something lacking since a cabinet reshuffle a year ago. The government says it will publish the drafts of its new PER and the renewable energy law this year, vowing to faithfully respect the obligations of the EU directive. Yet, despite gushing lip service on EU renewables policy from Prime Minister Jose Luis Rodriguez Zapatero, the government has not consulted with AEE on those or any other issue, Donoso notes. "We can only hope the authority of the directive together with the undeniable macroeconomic benefits of wind will keep government policy on the right track to 2020," says Donoso.

Michael McGovern, Windpower Monthly

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