Mayors bent on milking the sector -- Galician greed

Wind plant owners in Spain's windiest region, Galicia, are facing a battle to stop municipal authorities succeeding in their campaign to increase local taxes and licensing fees for wind. Last month, with the initial support of 91 local authorities, the region's federation of municipalities, Federación Gallega de Municipios y Provincias (FEGAMP), set up a specific wind power division to examine how municipalities can gain what it calls a "fair share" of the revenue generated from wind farm developments.

FEGAMP's José Crespo, who describes the region's wind farms as "the oilfields of the 21st century," says multi-national wind operators have tricked often poor and underdeveloped town halls of their fair share of the wealth generated. "The multinationals took advantage of the municipalities' ignorance of wind power," he says.

The federation's Eliseo Diéguez adds that wind plants are producing far more than was initially expected when Galicia initiated its wind power development strategy in 1995, and more than estimates made during individual project processing. The group now wants a review of the entire sector -- and claims the Galician government is open to the idea.

For taxes and licensing purposes, it wants wind farms to be classified as industrial units in the national property register, which determines the annual tax payable on property value. The new classification would mean a three-fold increase in property tax for wind farms, rising from the current 0.4% to 1.3%.

FEGAMP also wants the Galician Xunta, the government, to review permit licensing costs, currently around 2% of the value of civil engineering work. "Civil engineering, mainly covering turbine foundations, access tracks and underground power line conduits, represents just 15% of the overall plant investment. More valuable factors like towers, nacelles and blades are excluded," says Diéguez.

As well as seeking an increase in taxes and licensing fees, FEGAMP says it is also considering campaigning for the introduction of a wind production levy -- this could be at state level and if introduced would apply to wind plant nationwide.

Angry owners

Galicia's wind plant owners, now operating over 2100 MW across the region, have reacted angrily, insisting they are already working to tight margins. "Every time somebody sees oil wells where there are only windmills, they are hindering the development of an energy source that offers much hope for the future," says Manuel Pazo of regional wind association Asociación Eólica Gallega. "The sector needs planning, promotion and development, not increased tax burdens. This is clearly understood by the [higher] regional, central and European administrations." Pazo adds: The solution to municipal economic problems "cannot fall on one single sector."

Earnings from Spanish wind power are among the lowest in Europe according to the Spanish wind lobby, yet with over 9200 MW online it is has the second largest wind market in the world. The sector says its professionalism is behind the success, but FEGAMP argues slack taxes and levies have played their part. Welcoming the wealth and the 5000 jobs wind power has brought to the region, FEGAMP says it has no wish to harm the wind industry. "We want dialogue, both with the Xunta and the wind operators, to find the best way of making this work for all," says Diéguez.

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