The market is dominated by utilities increasingly concerned that wind, which is the country's biggest generator on some days, will push unamortised gas generation off the grid. And, despite Extremadura's new-found enthusiasm for wind, there are no guarantees that the central government will allow that capacity to move forward.
Spain has a 20GW backlog of wind projects nationwide, caused by the introduction of a central wind register by the socialist government in 2009. This closed licensing for new projects up to the end of 2012.
Of those projects that made it on to the register, around 1GW is uncompleted. Whether the projects allocated licences in Extremadura ever get built depends on how policy is developed by the conservative People's Party government, which took power in November's landslide election. The party has not yet shown its colours on renewables, although its electoral programme promises to make Spain "a natural gas market reference in the Mediterranean".
The regional government of Extremadura has declared it cannot put a date on the expected completion of the allocation due to the central register.
Compounding the freeze on new wind project permits, the outgoing government failed to replace rules governing the pay mechanism, which expire at the end of this year. National wind association Asociacion Empresarial Eolica believes that banks are no longer signing finance deals for new wind projects and that the market is now almost at a standstill.
Meanwhile, although some regions have preferred to dole out concessions to local businesses with little previous experience in wind, Extremadura has opted for Spain's global wind players (see table). Not so long ago, that option was a guarantee of project fulfilment. Nevertheless, the three big utilities, Iberdrola, Enel and Gas Natural, have landed nearly one third of the contracts.
These companies have invested over the past decade in combined cycle-gas power technology, which has soared from a negligible contribution to Spain's biggest single generator, with more than 26GW online, compared with 21GW from wind. However, increasing amounts of wind - which is prioritised on the grid - and declining electricity demand due to the economic downturn, mean that much of Spain's gas power is often idle.
The sector at large is increasingly convinced that the utilities are securing regional wind licenses with little intention of actually building the projects. Iberdrola's communications department has dismissed such accusations as absurd, underlining that it is the top wind operator in the world.
"The utility bosses' first obligation is to shareholders," pointed out Luis Merino of renewables research firm Haya Comunicacion. "They would be failing if they pushed for new capacity from wind to prevent existing, unamortised capacity from spinning revenue. Meanwhile, it's a fail safe that over half of the Extremadura capacity has gone to non-utility firms with wind experience."