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Spain

Spain

Europe: Draft law taxes visual impact

There is more bad news for Spain's wind industry, already adrift amid a lack of direction from energy policy makers.

The government of Galicia, a leading region in Spanish wind, has effectively suspended one of Europe's biggest onshore wind concessions with plans to introduce what is being called the global wind industry's first visual impact levy on wind plants. The outcome for some 2.3 GW of wind projects is uncertain.

Long bickering over development regulations has already seen Galicia drop from first to third place in installed wind capacity in the past three years. In January, the then-governing Galician nationalist/socialist coalition allocated 2.3 GW of wind developing rights to 29 companies (Windpower Monthly, February 2009). But regional elections in March restored to power the centre-right People's Party, which is now preparing a wind law whose visual-impact penalty threatens to trigger resistance from developers.

Regional President Alberto Nunez Feijoo does promise to restart project processing in the first half of 2010 and has offered assurances that the law will "merely clear up technical and legal aspects" of the existing wind regulation - a promise generally interpreted by developers to mean minor legal obstacles will be smoothed out to help existing project concessions continue.

But the wind sector is expected to staunchly oppose at least one aspect of the draft law: a "landscape impact" levy applicable to new and existing wind plants alike that would oblige owners of wind stations to pay a one-off charge of EUR2300 a turbine for installations with 5-7 turbines, EUR4100 a turbine for those with 8-15 machines and EUR5900 a turbine for stations with 16 or more machines. The Galician government estimates that 70% of the region's nearly 4000 wind turbines are in the last category, representing a total windfall of EUR16.5 million for those units alone.

Feijoo says that the levy responds to the large-scale deployment of turbines in the region, affecting the landscape, one of the region's chief assets. Feijoo adds that in times of economic crisis, "activities producing considerable profits should demonstrate solidarity with inland revenue". This has enraged wind businesses.

"We will oppose the measure all the way," says national wind association Associacion Empresarial Eolica (AEE). AEE officials say the draft law's stance on new wind capacity is of questionable legality at best and that application to existing wind farms has no legitimacy whatsoever.

Law change

Feijoo is also determined to outlaw a practice of favouring bidders for government contracts who cede 15% of each project's capital stake to the regional administration (Windpower Monthly, February 2009). January's 2.3 GW concession went mainly to local firms with little experience in wind, bypassing most of the developers of the region's existing capacity. Unlike the incumbents, the newcomers could not bring factories and jobs to Galicia, so were encouraged to pay the 15% stake as compensation. Feijoo says the practice goes against the principles of free enterprise, calling it legally unsound.

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