Oil Report

Spain solar power makers want stable regulations

MADRID, July 9 (Reuters) - A majority of Spain’s solar power producers on Wednesday asked the government to freeze its subsidy scheme for four years so the industry can meet 5 percent of demand for electricty by 2016.

The Photovaoltaic Business Association (AEF), composed of 13 companies which between them account for 70 percent of Spain’s solar power industry, said they had come together to ask for government support to boost output to 10,000 megawatts by 2016.

Government officials have estimated a more modest growth target of 6,000 MW by 2020. AEF estimates that installed capacity in solar power generators will reach 800 MW by the end of this year.

“(We aim) to gradually increase the efficiency of photovoltaic energy until in the medium-term it achieves parity with European costs for producing electricty from fossil fuels,” said new AEF president Jual Laso.

Spain plans to renew a scheme for paying special premiums to solar power producers beyond a September deadline but at a lower level.

Under the current scheme, producers receive a premium of about 0.44 euros ($0.692) per kilowatt hour generated by new solar plants, up to a cap of 1,200 megawatts of installed capacity.

The new scheme has yet to be published, but officials have told Reuters they expect new cap and premium would apply until 2010, when they would be reviewed again.

Solar power is part of Spain’s ambitious plans to boost renewable energy sources, and the country already has more than 15,000 MW of wind power, enough to provide 30 percent of electricity demand on a windy day.

Industry Minister Migeul Sebastian on Tuesday said energy saving and renewable energy would also help reduce greenhouse emissions and Spain’s hefty import bill for fossil fuels at a time when oil prices are soaring and stoking record inflation. (Reporting by Martin Roberts; editing by James Jukwey)