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ENVIRONMENT-SPAIN: Clean Energy, Questionable Business Practices

Tito Drago

MADRID, Jan 7 2008 (IPS) - Renewable energy sources enjoy excellent prospects in Spain, but there are complaints about business practices in the energy sector and the lack of effective enforcement of environmental standards.

Several companies have announced huge investments in clean energy. Among the foremost are Iberdrola, which is to invest 8.6 billion euros (12.2 billion dollars) in renewable energy, including wind power, from 2008 to 2010, and Abengoa, which is investing two billion euros (2.8 billion dollars) in solar energy. Part of these investments will be made in projects abroad, but most will be located in Spain.

Iberdrola, according to the company head, Ignacio Sánchez Galán, is a world leader in wind energy, with a current capacity of 7,300 megawatts which it plans to scale up to 13,600 megawatts in 2010.

Endesa, another Spanish transnational company, will install a solar energy plant in El Ferrol, a city in Spain’s northwestern region of Galicia, in the first quarter of the year. The plant will be symbolic because it will be located next to an old coal-fired thermal electricity station, and its output will be the equivalent of the energy needs of 10 families.

Future prospects are encouraging. Government sources estimate that by 2011, nine percent of Spain’s electricity will be produced from wind energy. Installing turbines at sea will be a particularly important part of this development.

Expert Emilio Menéndez stated in a report for the international environmental watchdog Greenpeace that wind energy at sea around the Iberian Peninsula has a potential capacity of 25,000 megawatts, and that Spain is not yet making use of this resource, unlike Denmark, Sweden and Britain, which have already installed wind parks off their coasts.

Environment Ministry sources told IPS that if, as they expect, the governing Spanish Socialist Workers’ Party (PSOE) wins the general elections on Mar. 9, the installation of wind parks at sea will receive a big boost and adequate financing.

The ministries of the environment and industry, tourism and trade have launched a study to identify appropriate areas at sea and on the mainland for installing wind parks, which is the first step, to be followed by the issue of permits for installation, use and energy sales.

But the socialist government of Prime Minister José Luis Rodríguez Zapatero has had to intervene to enforce fulfilment by energy companies of their commitments to cut carbon dioxide (CO2) emissions.

The companies were allocated free permits by the state, under the European Union’s Emissions Trading System (ETS), to emit up to 85.4 million tonnes of CO2 a year from 2005 to 2007. However, the energy companies passed the costs of the permits on to consumers, even though they had not paid for them.

The government decreed that the companies involved should return the money, which in 2006 and 2007 amounted to 1.2 billion euros (1.68 billion dollars). In 2008 the companies will have to pay back 1.45 billion euros (1.83 billion dollars) in consumer surcharges.

In the face of protests by the companies, the Spanish government replied that after the 2008 elections it will introduce a draft law to replace the decree-law of Dec. 21, 2007, now in force. This will allow in-depth debate and negotiations.

The Spanish Electrical Industry Association (UNESA) immediately responded that it would not stand idly by if the proposed law upholds the demand that amounts charged for the free CO2 emission permits be repaid.

If the PSOE wins the elections in March and Zapatero stays in power, he will have enough support in parliament to stick to his guns on this issue, as the United Left coalition, the Greens, the Republican Left of Catalonia and the Galician Nationalist Bloc will vote in his favour, as they did when the current decree-law was approved.

Environmental organisations approve of these measures, but they are also voicing further criticisms. According to Greenpeace, power companies are trumpeting their renewable energy credentials, but are still using generating systems based on coal or nuclear energy.

The Ministry of Industry, Tourism and Trade reports that there are six nuclear power stations in use, two of which have two reactors, making a total of eight reactors. There is also a plant that has reached the end of its useful life, and another which is being dismantled.

The eight reactors produce 19.8 percent of the total power in the Spanish electricity grid, ranking the country 18th in the world for its proportion of nuclear-generated electricity. Spain also has a nuclear fuel factory and a storage facility for radioactive waste, which has been the centre of controversy and the target of harsh criticism by environmental groups.