Early election could delay wind power tariff decision

SPAIN: AEE warns of destructive costs of political inaction, including failing to meet the European Union 2020 renewables target.

Spanish Prime Minister Jose Luis Rodriguez Zapatero's decision to bring Spain's general election forward to November could significantly delay a decision on post-2012 wind-power tariffs, prolonging the ongoing negative investment climate for the industry.

If the outgoing Socialist Party government fails to approve the legislation before election day, any decision on a future tariff regime would fall to the incoming administration and therefore probably be put back to the second quarter of 2012.

Industry ministry Miguel Sebastian said that his intention was still to approve the tariffs, but he acknowledged there would not be time to conclude all his department's legislative business before going to the polls.

Spanish wind-power sector organisation AEE has warned that leaving the decision on tariffs until after the election would "destroy wealth and employment and put at risk the achievement of the targets in the 2012-20 renewables plan".

AEE has been pressing the government to approve the post-2012 tariff regime for the past two years. Uncertainties about future tariff levels and quotas for new capacity have already taken their toll, with developers cutting back orders for new turbines to just 220MW last year from an annual 1.5-2GW in preceding years.

Potential decline

The organisation warned that if investment prospects weren't clarified, the incipient exodus of Spain's big turbine manufacturers from the domestic market would accelerate with the consequent knock-on effect on component manufacturers, developers and service companies.

Uncertainty over tariffs is not the industry's only woe. According to AEE, infrastructure and planning problems are currently preventing 1.4GW of government-approved projects from going ahead.

Longer-term prospects for wind power under a conservative Popular Party (PP) government - a likely post-election scenario - are mixed. PP think tank Foundation for Social Studies and Analysis, headed by former-prime minister Jose Maria Aznar, published a report this year calling for the expansion of nuclear generation and a cut in support for renewables.

However, an industry source said: "A PP government is unlikely to want to push for an expansion of nuclear power in the current climate of public opinion."

PP may also want to burnish its green credentials by scrapping the present government's controversial subsidies to coal-fired generation, which would indirectly benefit renewables, he added.

A spokesman for AEE also pointed to evidence of positive PP policy on wind. "PP-run regional governments in Galicia and Castilla-Leon have made important commitments to developing new capacity in their regions so there will be internal pressure for a steady-as-she-goes policy towards wind power," said the spokesman.

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in