February 2, 2009 / 2:17 PM / 10 years ago

Spain wind power firms see steady growth in 2009

MADRID (Reuters) - Spanish wind power companies in the world’s third-largest producer expect steady growth in capacity this year despite the credit crunch due to long-term investments, an industry spokesman said on Monday.

A rainbow hangs over electricity-producing wind turbines near the Spanish Basque town of Durango December 8, 2007. REUTERS/Vincent West

Wind power business group AEE tallied 16,740 megawatts in installed capacity in Spain at the end of 2008, a rise of 1,609 MW for the year.

“We expect a similar amount (of growth) this year,” AEE president Jose Donoso said at a news conference.

“The situation could be tough for speculative firms with a temporary view, but we have always said that this business is for long-distance runners, and they are the ones that will survive.”

Donoso said Spain’s wind farms were on track to meet a government target of 20,000 MW in capacity by 2010.

Last year’s increase in capacity was slower than a jump of 3,508 MW in 2007, when producers rushed to install new generators before the government cut subsidies.

The biggest producer of wind power in Spain is Iberdrola, with 27 percent of capacity, followed by Acciona on 16 percent and Endesa with 10 percent.

Wind power has boomed in recent years in Spain — the world’s biggest producer after the United States and Germany — as the government has sought to reduce heavy dependence on expensive fuel imports and to cut greenhouse gas emissions, which are far above Kyoto protocol limits.

Wind parks in Spain are entitled to receive a premium above the wholesale pool price, which is designed to gradually make them competitive with conventional energy.

AEE expects premiums to wind producers this year to rise to about 1.3 billion euros ($1.66 billion) from 1.1 billion last year.

Wind farms installed before January 1, 2008, are entitled to a premium of 40 euros per megawatt-hour until the end of 2012, whereas those that went online afterwards may receive a maximum of 82/MWh.

AEE has said its members can sell 1,000 MW of power to the pool at an average discount of 2 euros/MWh to the pool, and that the total savings outweigh the premiums they receive.

Apart from the credit crunch, Donoso said the sector faced challenges from a lack of connection points to the national grid and uncertainty over what will happen after a subsidy scheme affecting most installations expires in 2013.

“When a decision is taken on the new repayment scheme, we would rather the debate didn’t just focus on the tariff deficit, but on our contribution to the balance of payments,” he said.

The tariff deficit refers to an estimate by energy watchdog CNE of the gap between generating costs and the regulated rate at which utilities have to sell most of their power.

Utilities are allowed to recoup the deficit by deferring it to clients’ bills in the future. The deficit has ballooned in recent years and led to a heated debate, but the government and utilities are currently discussing ways to cut it.

Reporting by Martin Roberts

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