The US company Enron has obtained a licence from the Spanish Industry Ministry to operate in the commercial electricity market in Spain alongside Endesa, Iberdrola, Union Fenosa and Hidrocantabrico.

Enron said that in the first phase of its operations, it will sell power to companies consuming over 15 GWh each year, a group accounting for 30 per cent of the Spanish market.

The Spanish electricity market has an annual demand of 16 000 GWh, worth around $13.4 billion. Endesa controls 41 per cent, Iberdrola 39 per cent, Union Fenosa 16 per cent and Hidrocantabrico 4 per cent.

Enron’s move comes as the Spanish electricity market is increasingly liberalized. From 1 January, 2000, companies consuming over 5 GWh/y will be able to choose their supplier. This will drop to 1GWh/y in 2004 and from 2007, all consumers will be able to choose.

For the immediate future, the US company must buy power on the Spanish market but its long term ambition is to build its own power stations. It is studying two projects, one at Palos dea la Frontera in the Huelva region, and one at Escombreras in Murcia. Both would be combined cycle projects with capacities ov between 750 MW and 1200 MW.

The Spanish government believes the entry of Enron into the market will stimulate liberalization. So far, no major consumer in Spain has changed its supplier, although Alcatel’s Spanish subsidiaray has successfully renegotiated its tariffs. Other companies are expected to follow its example.