After a freeze of six months on building permits for new Spanish wind projects, there was a flurry of excitement in mid-November, with the wind media reporting that a decision had been made by central government to clear 5 GW of new capacity to 2012.
The news had the industry tingling in anticipation. "If true, and all pointers suggest that is the case, it's big news," said Luis Merino of renewable energy publishers and consultants Energias Renovables. "It means one of the world's biggest wind industries will get back to moving again after an almost complete standstill for half a year."
The additional 5 GW would likely be made up from applications that are reportedly approaching 14 GW. The country already has 17 GW online, and a target of 20.15 GW by 2010, when the existing production incentive for new wind capacity expires. Wind businesses have been given only a vague idea of what will take its place. The ministry of industry's press office declined to confirm what it continued to refer to as rumours of a 5 GW allocation. But it did make the rare pledge to publish a decision on the matter very soon.
That promise served to further boost the confidence that was already apparent on the stock market the day after the reports first appeared, on November 10. Wind turbine manufacturer Gamesa's shares rose 6%, the biggest leap in six months, while major developers also benefited. Acciona was up 4%, as were Iberdrola Renovables (1.4%) and Fersa (2.7%).
Developers seemed to entertain little doubt that a big allocation was imminent and all wanted to know whether their own projects were on the list. With negotiations ongoing between the industry ministry and wind association Asociacion Empresarial Eolica (AEE), most lips were sealed. "All I can say is we are awaiting the go-ahead on thousands of megawatts of advanced development put in cold storage," said Ramon Fiestas, secretary general of AEE.
In May, wind projects across Spain, many at an advanced stage, were brought to a sudden halt when the industry ministry passed a decree requiring central government approval for all new projects that were not yet registered as fully operational. Without approval, or pre-registration, projects were ineligible for wind power production incentives.
The decree shifted the authority for issuing final building licenses away from Spain's 17 autonomous regions. Industry minister Miguel Sebastian said the move was to ensure that Spain did not grossly overstep the 2010 target of 20.15 GW.
With combined regional targets totalling 23 GW for the later period 2012-2016, premium rates for wind at such large volumes have been deemed unaffordable, according to Sebastian (Windpower Monthly, June 2009).
The developer rush to get projects under the 2010 target created a logjam, triggering the six-month freeze.
The first sign of a thaw came when the industry ministry passed 750 MW of wind power onto the pre-register in late September, followed a month later by a further 850 MW. But, as the ministry acknowledged, the combined 1.6 GW merely rubber-stamped projects that were so advanced that many were already producing power and awaiting formal clearance to receive the production incentive. Other projects had reached construction.
Fiestas says that while a 5 GW allocation would surely be welcome, the industry most needs the ministry to provide visibility beyond 2012 for the thousands of additional megawatts being developed across Spain. At the end of 2010, the current system of production incentives expires. In September, AEE reported that the minister was planning a system of annual capacity quotas, which the ministry has since confirmed. It declines, however, to specify the capacity volumes considered. Nor has the ministry commented on AEE's claim that it plans to eradicate the production incentive and instead offer wind producers a guaranteed minimum price on the wholesale electricity market (Windpower Monthly, October 2009).
This leaves wind companies uneasy, prospects of a 5 GW go-ahead notwithstanding. "Until we know what's coming, we cannot plan ahead, clinch finance deals, attract investors or supply our turbine industry with new contracts," said Fiestas. "That will hit us hard unless we get a clear signal soon."