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Monday, May 11, 2009

Spain plans changes to renewable energy aid rules

Spain plans to change rules on state aid for renewable energy generators, an industry ministry spokesman said on Friday, arousing fears in the sector that its lucrative subsidies may shrink.

Under a new regulatory framework that has not yet been finally decided, the government could also change its targets for installed wind capacity, which are now at 20 gigawatts by 2012, rising to 40 GW in 2020, the spokesman said.

"In theory, new targets would be set on an annual basis," he said.

At current growth rates, Spain could meet the 20 gigawatts target well before the scheduled 2012.

The government took a step toward the new regulatory system on Thursday by announcing creation of a register for renewables projects that developers must sign to receive subsidies.

"This adds a new level of bureaucracy to the process of building wind farms...we are very worried," an industry source said.

"The government has committed itself to promoting renewable energy, so we hope that any changes to the current system should be improve remuneration for this technology, although this now sounds highly optimistic," the source added.

Wind farms installed before January 1, 2008, are entitled to a premium of 40 euros per megawatt-hour over electricity pool prices until the end of 2012, whereas those that went online afterwards may receive a maximum of 82/MWh.

Spain has already sliced the amount of solar capacity which qualifies for subsidies by more than half for 2009 after exponential growth in solar farms in 2008.



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