Spain Aims to Double Energy from Renewable Sources
Author: Sonya Dowsett
The plan aims for investment of 23.5 billion euros ($29 billion) in the renewable sector from 2005 to 2010, with private companies footing the majority of the bill. The government will put forward only 2.9 percent of the estimated cost.
By 2010, Spain wants 12 percent of consumed energy to come from sources like wind, solar and hydroelectric plants, compared to 6.9 percent at the end of 2004.
A previous renewable energy plan, spanning 2000-2010, has fallen well short of targets, especially for solar energy and biomass -- an energy resource derived from organic material like agricultural waste.
By the end of last year, the energy sector reached just over a quarter of the plan's objectives.
"The initial targets for renewable energy targets are not being met," Deputy Prime Minister Maria Teresa Fernandez de la Vega told a news conference after the cabinet approved the measures on Friday. "The previous plan was failing."
Spanish renewable energy firms like the world's second-biggest wind turbine maker Gamesa and Iberdrola, the world's largest wind energy company by installed capacity, are set to benefit from the plan, analysts say.
The government has raised the target for wind power energy from 12,000 megawatts under the former plan to 20,155 megawatts.
"This represents very good news for the main players in the industry in Spain, Gamesa, Iberdrola and Acciona. The new target will imply investment of 7 billion euros," said Daniel Gandoy, analyst at Deutsche Bank.
The new plan means an increase in annual production of renewable energies, mainly wind, of around 1,500 to 2,000 megawatts over the next 5 years in Spain, said Roberto Barrio, analyst at Espirito Santo.
Gamesa was leading the gainers in the flagship Ibex-35 index on Friday, up 2.4 percent at 12.31 euros by 1440 GMT -- around year-high levels.
Iberdrola welcomed the new plan on Friday, calling the targets sensible and feasible, and said it would help Spain meet its objectives under the UN's Kyoto protocol.
Under Kyoto, developed countries are meant to cut emissions of carbon dioxide, largely from burning fossil fuels in power plants, factories and cars, by an average 5.2 percent below 1990 levels by 2008-12.
But Spain has seen the biggest increase in the emissions of greenhouse gases since 1990 amongst the countries which originally agreed to Kyoto targets.
The amount of fumes spewed rose 40.5 percent in the 12 years spanning 1990 to 2002, according to UN data.