Wind power companies in Spain expect a steady growth in capacity in 2009 even after the credit crisis due to long-term investments. AEE.DU (AEE) had 16,740 megawatt (MW) of installed capacity in Spain at the end of 2008, a rise of 1,609 MW in the year. Increase in capacity in 2008 was slower than 3,508 MW increase in 2007. Wind power rose in Spain as the government has sought to reduce heavy dependence on fuel imports and to cut greenhouse gas emissions.
We expect a similar amount (of growth) this year, AEE President Jose Donoso said.
The situation could be tough for speculative firms with a temporary view, but we have always said that this business is for long-distance runners, and they are the ones that will survive.
Donoso said that Spain’s wind farms was on track to meet a target of 20,000 MW in capacity by 2010, set by the government.
Iberdrola S.A. is biggest wind power producer in Spain with 27% of capacity, followed by Acciona Energia with 16% and Endesa, S.A. with 10% capacity.
Wind farms in Spain are meant to receive a premium above the wholesale pool price. It has been designed to gradually make them competitive with conventional energy. Wind farms installed before January 1, 2008 are entitled to a premium of EUR40 per megawatt-hour till the end of 2012. But that went online afterwards may receive a maximum of EUR82/MWh.
AEE has said that its members can sell 1,000 MW of power to the pool at an average discount of EUR2/MWh and that the total savings are more than the premiums they receive.
AEE expects premiums to wind producers in 2009 to rise to about EUR1.3 billion from EUR1.1 billion in 2008.
Besides credit crunch, Donoso said that the sector faced challenges from a lack of connection points to the national grid and uncertainty over what will happen after a subsidy scheme affecting most installations expires in 2013.
When a decision is taken on the new repayment scheme, we would rather the debate didn’t just focus on the tariff deficit, but on our contribution to the balance of payments, Donoso, said.