The Spanish Government closed 2009 by including 243 wind projects in its registry for the preliminary assignment of remuneration.

By Toby Price

Many wind farm developers in Spain closed 2009 on an upbeat note, when the Spanish Ministry of Industry published the latest list of projects included in its registry for the preliminary assignment of remuneration (the Registry) governed by Royal Decree 6/2009.

The wind industry is already well established in Spain – according to the Spanish Wind Energy Association (AEE), wind-generated electricity covered around 14 percent of total demand during 2009, reaching a peak of 53 percent on 30 December – and this dominance is reflected by the fact that 70 percent of the 9,050MW inscribed in the Registry corresponds to wind energy projects.

This capacity will be brought on line in accordance with a road map published by the Government at the beginning of December, which establishes that close to 60 percent (3,767.83MW) can be connected immediately. This will permit Spain to reach the 20.25-GW target set in its 2005-2010 Renewable Energy Plan.

The Government has announced that the remaining 2,621.22MW will be installed in three quotas, enabling total capacity to reach 23GW by 2013.

This news come as a relief to developers who had to put projects on the back burner during much of 2009 after Royal Decree Law 6/2009 (RDL 6/2009) brought the sector to a standstill in April.

The legislation requires that wind projects be inscribed in the Registry to be able to sell power to the grid under the existing feed-in tariff (FiT) system.

However, the Ministry of Industry’s inability to quickly process applications and register projects caused a hiatus in the sector; with construction work grinding to a halt, banks and investors holding back financing, and jobs being put at risk.

After a long and frustrating summer, the Ministry of Industry only started making real progress with the Registry in the autumn. The process  concluded with a total of 6.3GW of wind projects inscribed.

Wind projects given the all clear

Renewable energy giant, Iberdrola Renovables, is among those companies that enetered 2010 secure in the knowledge that its wind farms will operate under the existing regime, rather than having to wait for a new FiT.

It has inscribed 1,175MW of projects in the Registry, the lion’s share (20 percent) of the total.

The utility company, Endesa, has registered 27 wind farms (876MW) through its subsidiary ECyR (representing 13.7 percent of the total).

Meanwhile, energy and infrastructure group, Acciona,  successfully inscribed 29 wind farms with a total capacity of 824MW, accounting for another 13 percent of the total registered.

Waiting game ahead

While those fortunate enough to have been included in the registry can proceed safe in the knowledge that they will receive the current €39 (£34; US$54) per MWh FiT, the industry remains concerned about what the future holds for those projects that have been excluded.

Only 43 percent of the 14GW of projects presented for registration have been given the green light. Additionally, 4,042MW of the 6,389MW registered are already in operation or under construction and cannot be considered as new capacity, meaning that the wind energy industry workload for the next three years is limited to 780MW a year (compared to the annual 2,000MW over the period 2004-2008).

The Andalusian Association of Wind Energy Producers and Developers (Aprean), for example, says that only 50MW of the 500MW it assigned through a tender process in February 2009 have been inscribed in the Registry.

Meanwhile, the Castilla y Leon Association of Wind Energy Producers (Apecyl) reports that 700MW already under construction in this region have been excluded and that the future of these wind farms “is totally up in the air”.

Apecyl General Secretary, Eugenio García, affirms that “it would be scandalous in the current economic environment, if 700MW of power and over €1 billion in investments were unable to generate the corresponding wealth”.

Along with other wind industry associations, Apecyl has urged the Government to make an exception and admit projects that are already operating or under construction, and García is confident that talks with the Spanish electricity grid operator, REE, and the Ministry of industry will steer these projects back on course.

Uncertainties after 2012

Nevertheless, an additional aggravating factor is the absence of a new regulatory framework to replace Royal Decree 661/2007 (setting the current FiT for wind energy), which leaves no outlook beyond 2012.

This is especially important in the wind sector, since wind farms take five to seven years to develop and hence, those to be installed from 2012 onwards should at least have a policy framework already in place on which developers can base their decisions.

However, as the Registry is now closed to further wind projects, the outstanding 7.7GW will have to wait for a new FiT and conditions to be introduced through a new royal decree, which will undoubtedly be less advantageous.

The president of the AEE, Jose Donoso, said in a recent press conference that the situation is "very worrying"; warning that over 5,000 jobs have been lost in recent months and that in 2010 this figure could increase to 40 percent of current posts.

AEE is therefore pushing the Government to bring forward part of the quota from 2011 (about 700MW) to 2010, and the entire 2012 quota to 2011, to enable the industry to regain momentum.

Moreover, industry players are calling on the Government to urgently sit down with them to draw up a new legal framework for wind and publish the new 2011-2020 Renewable Energy Plan, to put the sector back on course to covering 40 percent (60GW) of electric demand in Spain in 2030 – a target which the AEE still sees as feasible.

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