Reduced tax and strong winds attract Equinor to the Canary Islands

Equinor has secured a permit to build a 200MW floating wind project off the Canary Islands. The site would be Spain's first large-scale offshore wind farm.

Equinor developed the 30MW Hywind Scotland project in the North Sea
Equinor developed the 30MW Hywind Scotland project in the North Sea

Construction could begin as early as this year, with the site commissioned by 2024, according to the islands' government.

Acting regional industry minister Pedro Ortega told Windpower Monthly construction would begin "once the Spanish government has officially delineated the project area and issued permits".

The regional government said it expects Equinor to invest more than €860 million in the project "over the next few years", adding the development and operation of the wind farm could create between 120 and 200 jobs over the project's lifetime.

Three potential sites are under consideration: southeastern Gran Canaria, the channel between Fuerteventura and Lanzarote and the coast of Tenerife.

"Equinor has applied for preferential status as a developer in the Canaries special economic zone which will entitle it to a reduced 4% tax rate" under EU and Spanish government provisions to encourage economic development in extra-peripheral regions, Ortega explained.

"These fiscal conditions, combined with a favourable wind resource and strong regional government support, are what make the islands attractive for renewables developers", he said.

According to Ortega, renewable capacity in the islands has doubled to 600 MW since 2015 with a further 150 MW scheduled to come on line within the next two years.

The possibility of signing a power purchase agreement "depends on the decision of the ministry in Madrid".

"We are in negotiations with central government to ensure an electricity supply at a reasonable price," Ortega said.

Equinor were less forthcoming with details of their plans. "We have presented our project ideas to local and central authorities in Spain, but the framework to develop a project is currently not in place," a company spokesman told Windpower Monthly.

"We are excited that there is an ongoing process to establish a framework for offshore wind for the Canary region, and in respect for this process we do not want to comment on details," he added.

The Canary Islands is home to the first offshore wind turbine in Spanish waters — a 5MW Siemens Gamesa unit with a prototype 'telescopic' tower' on a gravity-based foundation — installed earlier this year.

Spanish startup EnerOcean is also due to commission a 200kW double-turbine floating demonstrator at a test site off Gran Canaria.

Ortega said other companies are interested in testing offshore wind off the Canary Islands and he has written to the central government to request that it create a working group to improve coordination between the institutions involved in this process.

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