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Renewable energy country attractiveness indices: Country focus - Spain - EY - Global

Country focus: Spain

Surge in M&A activity followed by subsidy cuts for wind

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All renewables index99
Wind index15101
Solar index414

Source: EY analysis
1 Joint


Email Víctor Durán Schulz
+34 915 72 76 90

Email Jaime López-Pinto
+34 91 572 50 28

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Spain is looking at its strategy for the next decade to meet 2020 EU emissions targets. This quarter it approved more modest targets in its final draft of the 2011-20 renewable energy plan, in an effort to control subsidy costs and continue encouraging growth.

It now aims to generate 20.8% from RES by 2020. The table below shows revised capacity targets across renewable technologies, with the most significant change being for PV.

Wind power

Spain’s landmark renewable energy Law, 661/2007, only controls wind power prices for new projects to the end of next year. Post 2012 regulations were proposed in a September draft decree sent to the national energy commission.

The draft sets out rules for wind farms from 2013. It proposes variable premiums diminishing for capacity installed each year over the 1.4GW annual target. Producers will receive a €20/MWh premium over market prices for the first 1.4GW, but the guaranteed floor price will decrease from the €77/MWh to €55/MWh, and will be reviewed annually.

The draft also limits subsidies for wind projects to 12 years with developers only receiving premiums during the first 1,500 operating hours each year. Premiums will not be revised in line with inflation.

The Spanish wind energy association says the measures will introduce a level of volatility that could make financing projects impossible, claiming they will produce a 40% reduction in support for wind farms installed after 2012. Stakeholders will be waiting nervously to see whether the draft will be passed.


Spain’s CSP sector continues to prosper as the world’s number one market, with installed capacity of 852MW at the end of July, almost double that of the US, the second largest market. Estimates put installed capacity at about 2.5GW by end 2013.

For finance, companies have tended to established JVs, particularly with Japanese partners like Mitsubishi, Mitsui, Itochu and JGC Corporation, and project financing has also become an increasingly viable option. As an example, eight European banks provided €288m for Solar Millennium AG’s 50MW Arenales project near Seville.

M&A activity

Before recently proposed subsidy cuts, 2011 had seen a surge in M&A activity, most notably the sale of ACS’s renewable assets to three buyers.

There has also been an increase in activity in the solar PV market, producing one of the largest investments to date: Munich-Re and KKR’s acquisition of a 49% stake in a diversified portfolio of solar parks and assets from T-Solar Global SA, for around €140m.

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