In the face of its poor performance in reaching EU/Kyoto targets for greenhouse gas emissions, Spain is studying changes in its renewable energy policy in a bid to bring more stability and visibility to the renewable sector. The latest audit shows that between 1990 and 2000 Spain's GHG emissions rose 34.8 per cent, well beyond the 15 per cent increase it is allowed by the EU/Kyoto framework agreement, which has an overall target of minus 8 per cent on 1990 by 2010.
Spain's poor CO2 record is in spite of the fact that it is a world class performer in some renewables areas. With 4830 MWe of wind energy capacity installed, Spain's wind industry, helped by government incentives, overtook the USA in 2002 to become the second biggest wind energy producer after Germany, .
Currently, the government sets a premium that renewable energy customers must pay on top of the price, aimed at compensating firms in the renewable sector. The government sets the premium according to movement in the price of electricity. However, a proposal from the energy regulator, which the government is likely to adopt, will take account of other factors, such as the cost of investment, operation and maintenance. This system will allow operators to know what income they can expect, rather than being dependent on fluctuating electricity prices.
Wind energy capacity in Spain has grown by 700 per cent over the last four years, and the industry is facing a profitability squeeze. In order to expand further, firms will have to build wind farms on sites that less suitable, as the best sites have already been exploited.
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