Both the fixed tariff for wind power in Spain and the alternative option, a kilowatt hour production incentive, remain unchanged for 2001, despite industry fears that the economy ministry was considering a 1.5% reduction in its support of renewables. The wind tariff stays at ESP 10.42 (EUR 0.063/kWh) and the production incentive -- paid on top of the price for which the wind electricity is sold -- at ESP 4.79/kWh (EUR 0.029/kWh).
Of the two support options, the market oriented production incentive is continuing to prove far more popular with wind plant operators than wind's fixed tariff. Last year, the Spanish electricity pool price was pushed up to an average ESP 6.29/kWh, mainly due to fossil fuel prices rising globally, particularly those of gas. As a result, the total payment for wind kilowatt hours rose to ESP 11.08/kWh (EUR 0.067/kWh), including the incentive. This rate was higher than the fixed tariff in 2000 and also slightly higher than the 1999 incentive rate, which averaged ESP 10.98/kWh, based on a pool price average of ESP 5.72/kWh. A 6% increase in demand for electricity in Spain in 2000 also played its part in pushing up pool prices last year, says Manuel Bustos of the national industry group, Asociación de Pequeños Productores Autogeneradores (APPA).
The power pool and its fluctuating market prices came into operation with Spain's electricity market liberalisation in 1997. To simplify invoicing, smaller developers may use a monthly average of the pool price for plant of 10 MW or under.
Fears of an across the board reduction in payments arose at the end of last year as the deadline for the government's annual readjustment of support to renewables approached. APPA countered that any reduction would be contrary to government policy and its 12% renewable energy objective for 2010. Bustos believes that pressure from APPA and other renewables lobbies must have played some part in what he suspects was a last minute change of plans.