Welcome to IEA Wind Member Country Activities for Spain 2011

Installed wind capacity in Spain reached 21,673 MW in 2011 with the addition of 1,050 MW, according to the Spanish Wind Energy Association’s (AEE) Wind Observatory. Smaller growth was expected for 2011 after the increase of 1,515.95 MW in 2010. Spain is the fourth country in the world in terms of installed capacity and produced 41,799 GWh of electricity from wind in 2011.

The mandatory Pre-allocation Register established by the Spanish central government has slowed wind energy deployment since 2010. As a result, the percent increase in capacity has been declining. The addition of 1,050 MW in 2011 represents an increase of 5.1% compared with a 7.9% increase in 2010.
Electrical energy demand decreased 1.3% from 2010 to 254.78 TWh. Wind energy met 16.3% of this demand and was the fourth largest contributing technology in 2011. Other big contributors to the system were nuclear power plants (22.6%), gas combined-cycle power plants (19.8%) and coal (17.0%).

During 2011, the government implemented new decreases to incentives for wind energy. The wind sector must share the burden of helping the country reduce its subsidy bill for green energy. Spain’s landmark renewable energy law, 661/2007, only governs wind power prices for new projects through 2012. A draft decree sent to the national energy commission in September sets out the proposed regulations post 2012. However, lobbyists are arguing the 2020 target will not be achieved if the bill is passed.

The draft bill sets rules for wind farms from 2013 onward and proposes a system of variable premiums. These premiums will diminish for capacity installed each year in excess of the annual target of 1.4 GW (required to reach the 2020 target of 35 GW). For the first 1.4 GW, all producers will receive a 20 EUR/MWh (26 USD/MWh) premium over market prices. The guaranteed floor price will decrease from the current 55 EUR/MWh to 77 EUR/MWh (71 USD/MWh to 100 USD/MWh), and it will be reviewed annually. The draft decree also limits subsidies for wind projects to 12 years compared with the previous projects. Developers would receive premium payments only during the first 1,500 operating hours each year. Finally, premiums will not be revised in line with inflation.

The AEE warned that these measures will introduce a level of volatility into support levels that could make financing projects impossible. It claimed that the proposed measures will result in a 40% reduction in support for wind farms installed after 2012. Wind sector developers and investors in Spain, and across Europe, will be waiting nervously over the coming months to see whether the draft decree will be passed.

The government deferred decision on the draft decree to the new government elected in November 2011. The conservative party won the elections and the first decisions will be how to end the national deficit created partially by the feed-in tariff system. A new law will likely come early in 2012.

During 2011, the Spanish wind sector installed about 1,050 MW, the lowest figure since 2000. Possibly the worst news for the sector, whose projects need from three to five years to mature, is that after December 2011, it is unclear if new projects will receive any feed-in tariff. This uncertainty will stop the installation of new wind farms for several years.