wind

Alarm bells sound in the Spanish wind sector

The wind sector in Spain is paralysed, and there is a high risk that 18,000 direct and indirect jobs could be lost if a new regulatory framework is not drawn up quickly. At present, only 780 MW/year of new capacity is in the pipeline until 2012, representing just 40% of the 2,100 MW of average capacity installed per annum in recent years (2004-2008). "The Registry of preliminary assignment of remuneration established by Royal Decree Law 6/2009 has paralysed us," claims the Spanish Wind Energy Association (AEE).

It is less than a month since the Spanish wind industry published the positive results of the macroeconomic assessment performed by Deloitte. However, after the list of installations included in the Register of preliminary assignment of remuneration* was published by the Ministry of Industry last week, the industry now feels that its future is in the lap of the gods, with a pipeline amounting to just 40% the average of recent years. The reason is that 4,042 MW of the 6,389 MW of wind power included in the Register is already operational or under construction.

No new orders for eight months

“Manufacturers have not received any new orders from wind farm developers for eight months, because they have had to wait until Tuesday 15 December to find out if their projects have been included in the Register,” explained the President of the AEE, José Donoso, in a recent press conference. Flanked by members of the Permanent Committee of the association, he said: "Furthermore, the situation is made even worse because the future beyond 2012 is unclear as no new regulatory framework has been drawn up to replace Royal Decree 661/2007”.

The AEE highlights that wind power, “which will meet close to 14% of the electricity demand this year and will become the third most important technology in the system after combined cycle and nuclear power plants, has grown in line with the forecasts in the Renewable Energy Plan (PER 2005-2010). There has not been any speculative activity and therefore, it was not necessary to establish a Register of preliminary assignment of remuneration to bring order to the final phase of meeting the targets of the Plan".

“Now we not even sure that the 20,155 MW target fixed in the PER 2005-2010 will be reached next year,” said the President of the AEE, who also pointed out that while wind contributes 44% of the electricity generated under the special regime (renewables and cogeneration), it only received 22% of the feed-in tariffs.

5,000 jobs already lost

Donoso also highlighted the disastrous effect of the paralysis on employment in the sector. “Of the more than 40,000 people employed in the wind sector, in between direct and indirect employment, more than 5,000 jobs have been lost in recent months, which could climb to 18,000 in 2010; i.e. 40% of total jobs currently available".

The current situation is made worse by the lack of a new regulatory framework to replace Royal Decree 661/2007, which “for the first time in our country, leaves projects without a future. In the case of wind, this legal vacuum is particularly telling, because projects have lead times of five to six years and therefore, new legislation should already be in place for the wind farms that will be installed after 2012 to enable developers to take decisions based on the legal conditions and remuneration that will be applicable to them”.

José Donoso insisted several times on “asking the Government, which has approved the quantity and distribution of capacity in three stages, to bring forward part of the amount, 700 MW, assigned for 2011 to 2010, in order to enable the wind industry to get back to speed, avoid the possible relocation of manufacturing plants to other countries, and ensure the Spanish industry is not put at a disadvantage compared to its competitors in coming years”.

The sector has also called for the approval of a special adjudication covering installations that will be operational before 30 April 2010 and have not been included in the Register because they did not fulfil one of the requirements of Article 4 of Royal Decree 6/2009; requirements that had not been published when the developers started constructing the affected wind farms.

The AEE also demands that the new decree regulating the sector be approved during the first quarter of 2010 and that it should take effect at the same time that the last wind farms covered by Royal Decree 661/2007 are brought on line. The new Renewable Energy Plan for the period 2011-2020 must also be approved and should enable the objectives established in the European Renewable Energies Directive enacted in 2009 to be met, which oblige Spain to ensure 20% of its final energy is produced using renewable sources. “This will only be achieved through a significant contribution from wind, the most effective and efficient of renewables". With this in mind, “we want the new PER to include 40,000 MW of onshore and 5,000 of offshore wind, plus a new special regulatory procedure for prototypes," said the AEE.

When asked whether the search for a consensus on energy between the Government and the Opposition could have something to do with the delay in approving the new regulatory framework, Donoso said "it does not appear to have anything to do with it”. During the press conference, he was also asked about President Zapatero's final words during his intervention at the Copenhagen Climate Summit – "Earth does not belong to anyone, only to the wind”. “We are just calling for consistency,” responded the President of the AEE.

* The registry of preliminary assignment of remuneration was introduced through Royal Decree Law 6/2009 on 7 May this year and obliges all new renewable energy projects to apply for pre-assignment; an essential procedure to obtaining the current feed-in tariffs established by Royal Decree 661/2007. Any projects not entered in the Register will have to wait for a new (and more than likely smaller) feed-in tariff, which has still not been fixed.

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