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Solar seeks its place under the Spanish sun

Sun-drenched Spain should be a natural for solar energy, and it is here that the technology is making an effort to stand on its feet financially without subsidies.

Solar seeks its place under the Spanish sun
View of solar panels facing a solar tower taken in Sanlucar La Mayor on April, 2011. File photo: AFP

Investors are now betting again on solar power generation in Spain, which for a decade was in the shadows as the country cut subsidies for the clean but expensive source of energy.

A plunge in the price of solar panels and lower construction costs has changed the maths, and new projects are moving forward again.   

Iberdrola, Spain's largest power company, this month launched a solar project with a capacity of 425 megawatts.   

And last week Spanish renewable energy firm Cox Energy signed a deal for the construction of 495 megawatts of capacity in Spain, and another 165 megawatts in neighbouring Portugal, in a €400 million ($490 million) investment.

Companies have sought authorisation for solar power projects across Spain with a total capacity of 24,000 megawatts, according to the director general of Spanish solar power lobby UNEF, Jose Donoso.

Subsidies stumble

That is the equivalent of 14 of the latest generation nuclear power plants that France hopes to launch later this year, after a decade of costly construction.

Spain was one of the pioneers of solar power-generation. Subsidies in the form of a high purchase price for solar power lured investors and homeowners to install solar panels, triggering an installation boom in 2008 that saw Spain's installed capacity jump five times to 3,355 megawatts.

But the global financial crisis, which ravaged Spain via a collapse of the property market, led to a bust in new projects and the cash-strapped government was quickly forced to abandon the subsidies.

Just 49 megawatts was added in 2015, and 55 megawatts in 2016, before picking up to 135 megawatts in 2017, according to UNEF figures.   

However in Germany, which kept up its subsidies, solar power swelled by six times although the country does not receive as much sun as Spain, meaning each panel produces less electricity.

The country now has more than 40,000 megawatts of solar power, compared with 5,400 in Spain at the end of 2015.   

But the sector has undergone “a complete reversal in less than six months”, according to Donoso.


Photo: AFP

Blazing return

One reason is that solar panels can now produce electricity at a lower price than traditional power sources such as coal, gas and nuclear.   

The cost of solar power production plunged 73 percent between 2010 and 2017, according the International Renewable Energy Agency (Irena), which predicts it will continue to fall.

Companies also realised the projects didn't need guaranteed prices from the state.

A tender for solar power projects launched by the government in July had so many bids that the price was capped at 30-31 euros per megawatt hour.    

According to the European statistical agency Eurostat, non-residential customers in Spain paid an average 107 euros per megawatt hour last year.   

Investors concluded that “it is better to run risks in the market then depend on regulated demand”, Donoso said.   

Moreover, investors into renewables know how much construction and operation will cost them, while traditional power stations have only a limited ability to lock in prices for fuel.

“It is much more profitable to invest in capital-intensive technologies (like photovoltaic power) than technologies where the raw material comes at a cost” like gas or coal, said the president of renewable energy lobby group Fundacion Renovables, Fernando Ferrando.

Room to grow

Donoso said this explains why major Spanish power firms such as Iberdrola “who stood aside from this sector” have suddenly jumped in.    

“The Spanish market will certainly be one of the biggest in Europe in the coming years,” he added.

A group set up by the government proposes setting as a goal having a total of 30,000-60,000 gigawatts of installed solar capacity by 2020, Donoso said.   

Spain's conservative government has so far not made solar power a priority, said Ferrando.

“We only use the sun for tourism not for electricity,” he said.   

Solar power represents just 3-4 percent of electrical power production in Spain, compared with 20 percent for wind power and 16-17 percent for hydroelectric power, according to the lobby group.

By AFP's Patrick Rahir 

ENERGY

Sweden to stop local governments blocking wind parks in final stages

Sweden's government has proposed a new law which will remove local municipalities' power to block wind parks in the final stages of the planning process, as part of a four-point plan to speed up the expansion of wind power.

Sweden to stop local governments blocking wind parks in final stages

“We are doing this to meet the increased need for electricity which is going to come as a result of our green industrial revolution,” Strandhäll said at a press conference. 

“It is important to strengthen Sweden by rapidly breaking our dependence on fossil fuels, building out our energy production and restructuring our industry. The Swedish people should not be dependent on countries like Russia to drive their cars or warm their homes.”

“We are going to make sure that municipalities who say “yes” to wind power get increased benefits,” she added in a press statement. “In addition, we are going to increase the speed with which wind power is built far offshore, which can generally neither be seen or heard from land.” 

While municipalities will retain a veto over wind power projects on their territory under the proposed new law, they will have to take their decision earlier in the planning process to prevent wind power developers wasting time and effort obtaining approvals only for the local government to block projects at the final stags. 

“For the local area, it’s mostly about making sure that those who feel that new wind parks noticeably affect their living environment also feel that they see positive impacts on their surroundings as a result of their establishment,” Strandhäll said.  “That might be a new sports field, an improved community hall, or other measures that might make live easier and better in places where wind power is established.” 

According to a report from the Swedish Energy Agency, about half of the wind projects planned since 2014 have managed to get approval. But in recent years opposition has been growing, with the opposition Moderate, Swedish Democrats, and Christian Democrat parties increasingly opposing projects at a municipal level. 

Municipalities frequently block wind park projects right at the end of the planning process following grassroots local campaigns. 

The government a month ago sent a committee report, or remiss, to the Council on Legislation, asking them to develop a law which will limit municipal vetoes to the early stages of the planning process. 

At the same time, the government is launching two inquiries. 

The first will look into what incentives could be given to municipalities to encourage them to allow wind farms on their land, which will deliver its recommendations at the end of March next year. In March, Strandhäll said that municipalities which approve wind farm projects should be given economic incentives to encourage them to accept projects on their land. 

The second will look into how to give the government more power over the approvals process for wind projects under Sweden’s environmental code. This will deliver its recommendations at the end of June next year. 

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