The future of the spanish wind industry

 

During the 90´s a system based on incentives was established, these are known as primes, it aimed at renewable energy development in Spain. It pursued to promote development of clean energies instead of penalizing the pollutant ones. It was a Spanish idea copied and reproduced, in different versions, in the whole world. This idea enabled the development of renewable energies, necessary to achieve future sustainable development. Since 2001 until 2011 wind installed capacity increased at a rate of 1.800MW per year. The industry development in this period has made the Spanish wind industry become a worldwide reference, but future is uncertain.

Since 2009 Spanish companies have been reducing competitiveness, one of the reasons is the thrust of companies from emerging countries as China and India. Now that a new regulatory framework is expected, investors have stalled actions in Spain. Because of that, manufacturers of wind turbines and its components are forced to sell all their products abroad. if Spanish producers don’t introduce new features to keep advantageous competitiveness, this temporary solution will be only sustainable until local manufacturers start producing their own models copying ours.

The consequences did not take long to show up; employment destruction, manufacturers dealing with wind turbines in stock, economic loses and brakes of the Spanish R&D in one of the few technological industries where we are still leaders.

In the end of January of this year, the Government decided to temporarily eliminate grants to renewable energy. Comprehensible, taking into account current economic circumstances and which affect the construction of future renewable plants.

What is really worrying all the agents involved in the renewable energy industry is the tax the Government wants to impose over the billing of renewable energies, especially affecting wind energy. This tax would be around 11% while production of other energies as nuclear, hydroelectric and thermoelectric will have a tax of 4%, causing an average decrease of the profitability of the constructed wind farms of about 30% and approximately 15% of 900 operating wind farms, will not be able to return the debt contracted with investors. The principal effect of this fact would be a rupture of the established rules in the industry, increasing the distrust of national and international investors’ in Spain, with consequences that everyone knows. It is estimated that 3.000 million euros would be collected with this tax; question aroused if this action will fix the deficit problem of the country, the loss of future competitiveness of the industry and loss of confidence of the investors…

In Spain is basing all its economic recovery on exports, exports where our companies shall not compete only in price but also in innovation. An article published on August 7th in cincodias.com states that, because of the recession of the Spanish economy, exporting companies have decreased prices and have reduced margins to maintain market share…despite of that, in the first trimester of the year, our share of global exports was reduced up to 1,61% relegating Spain to sixteenth position in the rank of world exporting countries, being overpassed by Saudi Arabia and India.

Therefore, in this period of deep crisis, we need companies which invest, or maintain the investment in R&D in key industries that work as an engine of the Spanish economy for the coming years. Life extension of wind turbines, new more efficient models, improvement in offshore technology… Spanish wind industry should continue growing supported in R&D&i. Companies are exerting themselves to maintain their investments in R&D, an arduous task as we have seen previously, hence it is worrying to think about the effects of the application of this new tax will.

Due to current economic crisis, sacrifices are being done in all industries; the Spanish wind industry is the one which most taxes supports in Europe, applying a tax of 11% would mean suppression from the list of worldwide reference industries.

There has been an extensive debate on changing the productive model of Spain. Everyone has been analyzing the industrial sectors in order to find industries to substitute the depressed construction sector. Among the candidates are industries with a high component in R&D that permit us to be a competitive country… what if we have already one of these industries and the only thing asked is not block its normal development?

To finish, insist in the benefits of the wind energy all necessaries times:

  • It employs 30.000 people; employment is it being destroyed already.
  • Employed highly qualified staff, avoid emigration of those highly qualified to foreign companies, biggest mortgage that Spain is incurring currently.
  • Emissions of CO2 avoided, 22.788.745 tons in 2010, or what is the same, a saving of 329,8 million of euros in emission rights.
  • Reduction of the energetic dependence. 8,9 million of oil tons in 2010, or what is the same, 1616,1 million of euros in savings in fuel imports.
  • As a renewable energy, it receives four time less incentives than fossil fuels
  • It is the renewable energy that most contributes to Spanish GDP, almost 3.000 million of euros in 2010, grants paid are the lowest, during last five years it has returned three euros to Spanish economy per euro received.

Author:

Fernando Aznar Laguna

SOURCES:

Spanish Wind energy Association(AEE)

http://www.aeeolica.org/

Estudio Macroeconómico del Impacto del sector eólico en España

Cincodias.com

http://www.cincodias.com/articulo/empresas/renovables-listas-activar-mercado-fusiones/20120806cdscdiemp_7/

http://www.cincodias.com/articulo/economia/exportadores-bajan-precios-margenes-mantener-ventas/20120807cdscdieco_1/

http://www.cincodias.com/articulo/opinion/eolica-funciona-pararla/20120405cdscdiopi_5/

European Wind energy Association (EWEA)

http://blog.ewea.org/2012/07/spanish-tax-the-final-blow-for-wind-energy-and-threat-to-wind-european-wind-industry/

Global Wind Energy Council (GWEC)

http://www.gwec.net/index.php?id=30&no_cache=1&tx_ttnews[tt_news]=386&tx_ttnews[backPid]=4&cHash=d2983abd9b