Sánchez Galán requests the Government puts brakes on solar energy deployment

Iberdrola's Chairman has lashed out against solar energy – photovoltaic and solar thermal electric – which he accuses of provoking the tariff deficit in the Spanish electricity system. However, it appears that Sánchez Galán has forgotten that his company is a global leader in renewables thanks in part to the huge amount of premiums it has received in the last few years from its wind farms, which have enabled wind power to become competitive with conventional energy sources.

"If we want expensive technologies and to be top of the class in immature technologies we will have to pay for it. We have to convince customers that this costs money", the Chairman of Iberdrola said last week. Ignacio Sánchez Galán has blamed the Spanish electricity system's deficit on the feed-in tariffs received for solar energy.

During last week’s presentation of Iberdrola’s results, Sánchez Galán said the prices of electricity generated by ordinary (traditional) energy sources are lower than those paid in neighbouring countries, while "generous" premiums have been given to solar plants, which have been installed "en masse", reported the leading Spanish language news agency, Efe.

At present, Iberdrola’s Chairman sees solar technology as a "financial product" that will receive two-thirds of the €7 billion in premiums that it has been calculated will be allocated to special regime power sources in Spain this year, while only contributing 2 % of the electricity generated. Sánchez Galán also said that when there is no sun, solar thermal electric plants run on gas and when the sun shines, a megawatt is paid at €700.

Action needed to curb this “nonsense”

If no action is taken, he warned, this "nonsense" will lead to electricity systems costs rising by between 10 and 12% or €3 billion. "We have the most expensive energy in Europe because we have the most expensive plants," declared the Chairman of Iberdrola, who argued that the premiums received by wind farms in Spain is "in line or below" that of other countries. Sánchez Galán insisted that the problem with renewables lies not with wind power but with solar power, "in the past with photovoltaic and now with solar thermal electric", to which he added that all "logical" countries are committed to wind power.

One of these logical countries, judging by the level of inward investments by Iberdrola Renovables, is the United States. However, despite Sánchez Galán’s attack on solar energy, last week the company announced it will build its first two photovoltaic plants in the US with an aggregate capacity of 50 megawatts. According to the company, “these two facilities will give Iberdrola Renovables a foothold in the photovoltaic segment in the US”.

The Alamosa facility is to be located beside Mosca, Colorado, one of the regions with the best solar conditions in the US. The solar farm will have 30 MW of capacity. Construction is expected to begin at the end of this year and the facility is slated for start-up towards the end of 2011. The 20 MW Copper Crossing solar park, meanwhile, will be built in Pinal County in the state of Arizona and is expected to be commissioned in June 2011.

“These two projects come under Iberdrola Renovables’ strategy of investing in non-wind opportunities (97% of the company’s capacity is wind technology) that meet its sustainability and return criteria,” announced the company.

Iberdrola’s earnings up 2%

Regarding the results announced last week, Iberdrola posted net earnings of €2,069.6 million in the first nine months of 2010, an increase of 2%. It achieved this positive performance despite lower extraordinary gains from the divestment of assets amounting to €87.4 million compared to €222 million in the same period of the previous year. In fact, earnings growth would have amounted to 6.7% in like-for-like terms, excluding these lower extraordinary gains.

The group headed by Ignacio Sánchez Galán is confident that the utility will continue along "the path of future growth" thanks to increased liquidity and collection of the tariff deficit, reports Europa Press. In coming years, it also aims to drive its industrial growth plans through sustainable and high added value energy projects in its reference markets in the Atlantic area.

The company will focus on zero-emissions energy such as renewables, hydro and nuclear, smart grids and electric vehicles, where the regulatory framework is favourable. High potential markets identified by the company for the present and future include the US (transmission, distribution and renewables), the UK (transmission, distribution, combined cycles gas, carbon capture, nuclear and wind, both onshore and offshore), Brazil (distribution, hydro and wind), Mexico (combined cycles and wind), and Spain (hydro and wind).

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