Incentives for wind pay off boosts Spanish economy

Europe: The contribution of Spain's wind power sector to the country's gross domestic product (GDP) grew by 12.7% in 2008, according to findings by international consultancy Deloitte.

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The wind industry directly contributed EUR2.3 billion to the GDP in 2008, or 0.24% of the total, and indirectly added EUR1.5 billion more, totalling EUR3.8 billion, or 0.39% of GDP. This figure dwarfs the EUR1.14 billion it received in production incentives.

The figures are an update to Deloitte's previous year's report, Macroeconomic Impact Study of Spain's Wind Sector, commissioned by national wind association Asociacion Empresarial Eolica (AEE) (Windpower Monthly, January 2009). The first edition calculated wind's 2007 combined direct and indirect contribution as EUR3.27 billion, or 0.35% of GDP. Wind's 2008 share of GDP is thus 12.7% above that of 2007.

Good investment

The study, says AEE, undermines the many critics who argue that production incentives make the technology too expensive. AEE president Jose Donoso welcomes the findings, saying: "Wind power is just about the best investment the Spanish economy can make."

Wind contributed more to Spain's coffers than it received, as taxes paid by the sector exceeded incentives paid out by EUR243.7 million. The wind sector provided more than 41,000 jobs in 2008 - 23,000 directly.

The biggest contribution to GDP came from wind plant development and operation, with 140 developers and operators generating EUR695 million, closely followed by 19 turbine facilities generating EUR628 million. The 270 component manufacturers accounted for some EUR530 million, with EUR361 million from the 277 service providers. Deloitte tallies wind industry exports at EUR2.9 billion during 2008. Imports totalled EUR1.9 billion, resulting in a positive export balance of EUR1 billion for 2008, up from EUR947 million in 2007.

Donoso says that while the macroeconomic impact is reason enough to continue to support wind power, it is a mere by-product of generating clean energy and reducing reliance on foreign energy supplies. Spain currently meets 80% of its primary energy needs from abroad, primarily with fossil fuels.



Deloitte calculates that 31.1 GWh of wind production on the electricity grid in 2008 replaced power generated from coal and combined-cycle gas plants and from fuel-oil generation, avoiding 19 million tonnes of carbon dioxide emissions. At a 2008 reference price of EUR21.10 a tonne for CO2 emissions rights, wind saved the electricity system EUR405.5 million. Wind generation also saved Spain EUR2.2 billion in fossil fuel imports in 2008, compared to EUR1.014 billion in 2007.

AEE says it hopes that the government will consider this year's study as it determines policy support for wind in 2012-2020, rather than bowing to pressure to reduce incentives.

After publication of the first edition of the report in 2009, despite it highlighting economic rewards from wind, the industry ministry applied quotas to new wind capacity. The ministry also told AEE that it aimed to remove production incentives from 2012, maintaining a minimum price for wind generation on the wholesale electricity market as the sector's sole market support mechanism (Windpower Monthly, October 2009).

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