Spain revises incentives for hydro, other renewables

Spain has published draft rules on renewable energy that are designed to ensure an attractive return for investors in hydropower and other renewable energy projects.

The government’s goal, as part of its efforts to rein in Spain’s runaway carbon dioxide emissions, is to produce 30 percent of the country’s electricity from renewable sources by 2010. The National Energy Commission must evaluate the proposed rules before they become final.

The Industry Ministry said the rules would guarantee a return of 7 percent for hydroelectric and wind plants if they sell their power in the regulated market, and between 5 and 9 percent if they opt to sell in the open market.

Solar power, which has a minimal presence in Spain, would have a guaranteed return on investment of 7 percent, the ministry said. Other technologies such as biomass or biogas would have a guaranteed return of 8 percent if they sell in the regulated market and between 7 and 11 percent if they sell outside.

Industry: Without incentives, Spain to miss renewables target

Spain’s renewable energy lobby, Asociacion de Productores de Energias Renovables, has been pushing for clear cut rules for the sector. Chairman Jose Maria Gonzalez Velez has predicted that Spain is unlikely to meet its renewable energy target for 2010 without clear regulations and incentives.

Spain’s CO2 output has risen at least 50 percent since 1990, the base year for the Kyoto agreement on climate change. Spain ratified Kyoto and agreed to an increase of only 15 percent.

The government’s energy strategy, in line with the European Union’s efforts to curb greenhouse gas emissions, states that by 2010 it should be tapping renewable sources for 12 percent of the country’s primary energy, 30 percent of its electricity, and almost 6 percent of its transport fuel.

The government’s plan for 2010 includes building new small hydroelectric plants, quadrupling biomass generation, doubling wind energy capacity, and rapid growth of solar power.

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