Growing market share in Spain

A joint venture between Italian utility ENEL and Spain's Union Fenosa is quietly carving a niche in the Spanish wind business. ENEL Union Fenosa Renovables, known as EUFER, boasts nearly a 4% share of the Spanish wind market and is eyeing further opportunities for growth, both in Spain and in Portugal.

The Italian-Spanish partnership was set up in December 2003 when ENEL acquired an 80% stake in Union Fenosa's renewable energy unit for EUR 168 million. Fenosa has an option, which it is expected to exercise, to buy back a 30% stake by the end of 2007. Meantime, the group is managed jointly by the two partners.

EUFER's owns stakes in renewables capacity in Spain amounts to 510 MW, most of it wind energy. "The idea in the original business plan was to arrive at about 1000 MW in consolidated capacity, mostly in wind, in the next five years," says ENEL's Maurizio Bezzeccheri. Projects to allow EUFER to reach this initial goal have already been identified.

Bezzeccheri notes, however, that the Spanish government's decision to boost its target for national wind capacity to 20,000 MW from a previous 12,000 MW is making EUFER more ambitious. "This will push us to look for further possibilities for growth," he says. Despite recent rumours of a change in the remuneration system for wind energy in Spain, Bezzeccheri says that for now ENEL is quite satisfied with its investment in EUFER.

Meanwhile, the venture is getting set to operate in Portugal. "In Portugal, we have initiated some development opportunities and are also looking at acquisition opportunities in wind," says Bezzeccheri. The company may respond to the Portuguese government's request for 1700 MW of wind power, the deadline for which was pushed back one month from end January to end February. "We are analysing this to see what the risk profile is and to make a decision on whether to bid," he says.

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