2010/09/06

(BN) Spain Planning to Allow More Experimental Wind and Solar Plants

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Spain Planning to Allow More Experimental Wind and Solar Plants
2010-09-05 23:01:00.1 GMT


By Marc Roca
Sept. 6 (Bloomberg) -- Spain's Industry Ministry plans to
re-establish incentives for experimental wind and solar thermal
power plants even as it clamps down on subsidies for existing
and future generation facilities.
The proposal, detailed in a draft of legislation the
ministry is working on with the energy regulator, would allow
160 megawatts of onshore wind projects and up to 80 megawatts in
solar thermal plants by 2013, if the plants harness technology
not commonly in use elsewhere in the world.
The plan would modify current regulations that closed
grants for all projects until 2014. The legislation is part of
Prime Minister Jose Luis Rodriguez Zapatero's effort to rein in
above-market rates for renewable energy projects that prompted a
boom in solar and wind generation plants in the past few years.
"It's not enough to trigger significant technological
innovation in Spain," said Francesco D'Avack, solar analyst at
Bloomberg New Energy Finance. "The best that can be said about
the new decree is that it restores confidence in the sector."
Spain, struggling to overcome a recession and narrow its
government budget deficit, is expected to pay more than 6
billion euros ($7.7 billion) in subsidies to clean energy
projects this year, according to official forecasts.
In November, wind projects with a capacity to generate 6
gigawatts of power and 2.44 gigawatts of solar thermal plants
were granted permission to receive the higher rate through a so-
called feed-in tariff covering output from 2010 to 2013.

Solar Incentives

Under the proposed rules, the registry that grants
incentives for solar thermal and wind power plants will be re-
opened for applications from projects that can show they're
innovating new technology.
The draft was sent by the ministry to energy regulator CNE
last month. It also fleshes out the government's agreements with
the wind and solar thermal industries in June, including limits
on subsidized hours.
The final draft may be revised to include suggestions from
the regulator, known as the CNE, and the State Council, said
Emilio Jarillo, energy spokesman for the Industry Ministry. The
document was obtained from an industry official with access to
the information and confirmed by the ministry.
"Given August was a break for the CNE, it might still take
about two months for the bill to be approved by ministers,"
Jarillo said by e-mail.

Earnings Limit

The document also quantifies for the first time the limits
on the number of hours per year solar thermal plants can earn
above-market rates for power. The limits range from 2,855 for
solar thermal plants to 4,000 hours for facilities using the
most common parabolic trough technology.
"These agreed caps are not a real limitation and don't
affect business plans," Luis Crespo, general secretary for
industry association Protermosolar said by phone. "It just aims
to prevent individual plants from growing in the future."
In addition, the draft confirms the ministry's decision on
Aug. 1 to cut rates for future photovoltaic projects by between
5 percent and 45 percent beginning in the fourth quarter and to
limit all subsidies to 25 years.
The document doesn't include new details about potential
cuts for existing projects, the most contentious issue between
industry executives and government ministers. The government
plans to address that section of the legislation once it has
more information about how much it will save from a crackdown on
companies obtaining the best power rates through fraud.

For Related News and Information:
Top renewable energy page: GREEN <GO>
Energy top news: ETOP <GO>

--Editor: Reed Landberg, Todd White

To contact the reporter on this story:
Marc Roca in London at +44-20-3216-4638
or mroca6@bloomberg.net

To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or
landberg@bloomberg.net