Regions seek to dodge moratorium

SPAIN: Spanish wind lobbyists are brainstorming proposals to mitigate or evade the national renewables moratorium that suspends power subsidies. Three regional governments -- Galicia, Extremadura and Canary Islands--have requested exemption. Meanwhile, there is a groundswell of support for proposals to implement a surcharge on petrol and diesel to help pay for renewables.

by Michael McGovern 26 April 2012

National wind association AEE supports only the Canaries' case. It argues that the region's target of 600MW of wind by 2016 will save the national electricity system €257 million a year, as it would displace heavily subsidised fossil-fuel power.

AEE does not support the other bids. "That would open a Pandora's box of differential treatment among many major wind regions," said AEE policy director, Heikki Willstedt.

Extremadura, Spain's poorest region and still with no wind capacity, allocated 1GW of wind licenses in 2011. The regional government's plea for exemption is to save that bid and kick start a local industry, creating 5000 jobs.

Galicia meanwhile already has Spain's biggest wind industry, with 3.3GW of wind power online. The local wind association, Asociación Eólica de Galicia, has distanced itself from the regional government's plea for exemption. Nevertheless, it claims that any new regulation governing Spain's target to install 15GW of wind by 2020 should favour efficient wind sites over regional politics. Galicia's wind capacity factors often reach 35%, double those in Extremadura.

The central government declined to comment on lobby proposals until it has completed a plan to tackle the electricity sector deficit, scheduled for June. The deficit was caused by a 1999 law preventing consumer electricity prices rising by more than 2% annually, regardless of generation costs, which have soared beyond that level.

National electricity system costs could be reduced if renewables costs were spread across the whole energy sector, argues AEE. The electricity system has assumed the entire burden of the production incentives electricity distributors must pay to wind generation in addition to the price achieved on the wholesale electricity market. AEE proposes a 'green tax' on fossil fuels to help support wind power until it becomes competitive with conventional power between 2015 and 2020.

"We're not suggesting oil takes the entire burden, but if it did, an extra €0.10 per litre would cover the entire cost of current renewable power incentives," said Willstedt. A tax somewhere up to that point is affordable, he said, since Spain's petrol and diesel prices, at €1.48/litre and €1.37/litre respectively, are well below the European average of €1.60 and €1.44.