Home industry says foreigners are favoured

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With a new 10 MW wind farm on line in the Canary Islands and plans to enlarge existing sites in Tarifa, Spanish wind moguls should be applauding. Yet the seemingly rosy future for energia eolica in Spain is not being celebrated by the industry, which fears it could be edged out of the market by foreign competitors.

In the face of strong competition from abroad on the domestic and international markets, private wind power companies in Spain are demanding a greater commitment by the government whom they accuse of failing to give the nascent industry sufficient backing. Their main gripe is the government's policy on financial and technological support which they say is not only jeopardising potential Spanish exports, but favouring foreign investors and turbine manufacturers. These have already made deep inroads in the Spanish market and are not about to retreat.

"It's as if the government is deliberately hamstringing our efforts to compete on the domestic market when we have demonstrated time and time again that our machinery is as good as what's on offer internationally," says Antonio Mart’nez Garc’a of Ecotècnia, one of the two biggest wind turbine manufacturers in Spain. According to Mart’nez Garc’a, the Spanish government is not investing enough in the efforts of local companies to develop turbines and components, and certainly not as much as governments are doing in other countries. "Right now, we have the same technological know how and capabilities, but give it a decade or even less and we'll be left way behind the Americans and the northern Europeans, just edged out of the market," he says.

Another grievance voiced by Ecotècnia and echoed by several other members of the Spanish wind industry present at the recent Seminar on Wind Power in Southern Europe was the low price paid for wind generated power. Unlike other nations conscious of the need to cut down on CO2 emissions to meet European Union (formerly the European Community) standards, Spain does not contemplate giving wind power favoured treatment or levying taxes on fossil fuel generated power, they claimed. This is because Spain has still to reach the CO2 levels of other industrialised nations before it has to cut back.

But more worrying for Spanish companies, according to Mart’nez Garc’a, are the advantages that foreign companies have in Spain. "They can come here backed by their own banks, which have a long tradition in wind power finance. Usually they have been granted soft loans which we currently can not obtain. Spanish banks want grid connection contracts to last long enough to cover the cost of the construction loans, but frequently the utilities refuse to sign up for long term contracts. This makes it very difficult to get proper financing. Foreign companies -- especially those based in the European Union -- have the edge over Spanish wind power manufacturers because of this. If we don't get some support now we are going to be gobbled up by the foreign competitors," says Mart’nez Garc’a.

The pessimism is not shared, however, by other Spanish companies who express faith in Spanish bureaucracy to brake the influence of foreign companies, at least in Spain. An example is the recent experience of Vestas in the Canary Islands which withdrew from a wind farm venture with Aerogeneradores Canarios SA after a huge bureaucratic snafu with the island's utility, Unelco (see previous story).

"With regard to the domestic market, it works both ways," says Joquim Corominas of Tren, a prospective wind plant developer. "Foreign companies are going to find the same problems as we do when trying to penetrate the market, and perhaps even more." William Hopkins of French Vergnet agrees. He believes the only way foreigners are going to be able to access the market without burning their fingers is by joining forces with a Spanish competitor.

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