Spain’s wind power industry said on Monday new government regulations would knock its growth on the head, while the industry minister accused the sector of defending oversized profits.
Spain has almost 12,000 megawatts (MW) of wind generation and the government wants to reach 20,000 MW by 2010 as part of its renewable energy plan.
Boosting renewable generation is key to Spain’s efforts to curb its greenhouse gas emissions, which have swollen by 50 percent since 1990, the base year for the Kyoto agreement on global warming.
But the Industry Ministry wants to curb the premiums paid to wind generators and argues that these will be a burden on the consumer in future years.
Jose Maria Gonzalez Velez, president of the renewable energy association APPA, said the government’s calculations were wrong and its claims that wind power was overpriced were false. A less favourable pricing regime will undermine the sector’s growth, he said.
“With this new draft law, not one wind park would have been built,” he told journalists.
APPA says that changes in the draft law, now being vetted by the energy regulator, will cut returns on investment to 5 percent at best.
Industry Minister Joan Clos said the sector’s defence of its current position was to be expected.
“The companies are used to very high returns on equity, of around 40 percent,” he said in an interview in financial daily Cinco Dias on Monday.
“We will continue to support renewable energy, including wind, but will focus on the types that have not yet taken off, like biomass or solar, while guaranteeing a fixed basic return for wind energy.”
APPA says changing the rules is damaging in itself and contests the idea that wind power is subsidised.
“The only thing we ask for is clear, stable and predictable rules so that banks will finance our projects,” Gonzalez Velez said.
APPA says it brings benefits to society worth more than 2 billion euros (US$2.6 billion), far more than the premium paid for wind power.
“Renewable energy would be competitive without premiums if other forms of electricity charged the true cost of production,” he said, referring to coal subsidies and the cost of the nuclear moratorium as well as greenhouse gases produced by fossil fuels.
REUTERS NEWS SERVICE
27 February 2007
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