Expectations for the Spanish wind energy industry for 2011 are not very optimistic

The R&D activities in Spain are structured in Research, Development and Innovation (R&D&I) programs funded by the national government and by the autonomous communities. The national R&D plan covers the period from 2008 to 2011 for the R&D and technological program prepared by the Spanish national government. It is based on the national science and technology strategy instead of thematic areas as in previous calls.

The national program consists of basic research and innovation programs. The basic research program is not oriented research and the leaders are researchers from universities and public and private R&D centers. The Innovation Program is focused on technological research and leaders Figure 4 Installed wind capacity by manufacturer at the end of 2010 must be researchers from private or public companies (SME’s or large companies) with the collaboration of research centers (private or public research centers, universities).

Three main subprograms are included in the innovation program:
• Industrial and public researchcollaboration
• Strategic consortia for technical research
• Support actions

The industrial and public collaboration subprogram was launched to increase the collaboration between wind energy companies and research centers with clearly defined objectives and results oriented to the development of innovative devices, systems, processes, service, or equipment with clear market orientation. For this reason, most of the funding is based on soft loans for the wind power companies and granting only available for public research centers and partially for private research centers.

The first instrument within this program was called “PSE -Singular and Strategic Projects” which are Strategic National Consortiums for Technological Research led by the industrial sector in collaboration with the public and private research centers. This program is already closed but there are still projects on going until mid-2011.

A project called Minieolica is developing to promote the Spanish small wind energy sector (new development of wind turbines up to 100 kW). This project involves more than six manufacturers of small wind turbines and components, three engineering companies, five public and private research centers, three universities, and three end users. The 16 projects are organized in three main areas:

Product development supports manufacturers to develop new products from 1 kW and 5 kW for urban and residential applications (innovative horizontal- and vertical-axis wind turbines) and from 20 kW to 100 kW very reliable, robust, and efficient new designs of small wind turbines for residential, industrial, and agricultural applications.

Technical development supports breaking technological barriers and advancing development in key areas for small wind turbines.

Infrastructure development promotes, disseminates, sensitizes, and collects information for the small wind turbine sector.

Another important PSE project approved within the R&D strategic publicprivate entities collaboration is a new project called Emerge lead by the company Iberdrola Renovables. It was approved in 2009 for four years. This project is developing useful technology to build offshore wind farm plants in deep waters. The partnership is composed of private companies as Iberdrola Renovables, Alston Wind, Acciona Energia, and KV Consultores and R&D centers as Robotiker (Tecnalia Corp), the Catalonia Institute for Energy Research IREC and public research organizations such as the Basque Country University and UPV and Cadiz University UCA.

This project is composed of four sub-projects:

Subproject 1: Design and development of wind turbines for offshore wind farm application

Subproject 2: Design and development of floating support structures for offshore wind farm applications

Subproject 3: Analysis and development of electrical link technology for deep waters offshore wind power applications.

Subproject 4: Analysis and developments of wind turbine-support structure coupling solutions.

The total budget of the Emerge project is 9.2 million euro or 12.4 million USD (2009-2012). In 2010 the PSE Instrument has been replaced by a new instrument called the INNPACTO Program.

In 2010, two projects were approved:

Offshore wind generation system in deep seawaters lead by Iberdrola Renovables (the second phase of project Emerge). The goal is to develop useful technology to build offshore wind farms in deep waters, including floating platforms and HVDC connections. The consortium includes private companies like Iberdrola, Alston wind, Acciona energia and KV Consulting and R&D centers like Tecnalia Corporation (Robotiker), Irec, Cener, Cantabrian Institute of Hydraulic – ICH and Universities like University of Basque Country UPV and Cadiz University UCA. The budget is 5.53 million euro (7.43 million USD).

The Project duration is 30 months (6/2010 – 12/2013). This project is structured into four sub-projects:

Subproject 1: Design and development of wind turbines for offshore application

Subproject 2: Design and development of floating support structures for offshore wind farm applications

Subproject 3: Analysis and development of electrical link technology for deep waters offshore applications.

ubproject 4: Analysis and developments of wind turbines-support structure coupling solutions.

Project titled “Development of a Intelligent floating Meteorological tower for ocean and wind resource characterization.“ The strategic consortia for technical research sub programs was launched to increase the collaboration between companies and research centers. It has clearly defined objectives to build capacities in private strategic consortiums to address technical challenges and make these companies leaders in innovative technologies.

The leaders of the consortia must be market leaders with interest to develop innovative technology for the future. Most of the funding is grants for the companies (50% of the total budget); the rest must be fund by the company itself and by public research centers and private research centers must be subcontracted by the companies.

In this subprogram, the most important instrument, CENIT, is carried out by the Center for Industrial Technological Development (CDTI) from the Spanish Ministry of Science and Innovation. It is a Spanish-government program aimed at increasing investment in R&D for both public and private initiatives over the next few years, with the objective of reaching 2% of GPD. The program started in 2006, and so far four R&D projects have been approved: Windlider 2015 (completed), Eolia (in progress), Ocean-Lider (in progress), and Azimut (New).

Eolia is a consortium of 16 companies led by Acciona Energia with a CDTI grant of 16.7 million euro (22.5 million USD), not quite half the overall 33.9 million euro (45.6 million USD) estimated total investment required. Eolia includes 25 research centers and seven private companies subcontracted by the consortium. Its objective is to develop technologies enabling deployment of offshore wind plants in deep waters (over 40 m). The project’s research activities integrate a series of technologies, including energy (wind power and other electricity technologies) aquaculture, desalination, construction, naval and marine grid connections, and O&M technologies.

The Ocean-Lider project is designed to help develop breakthrough technologies to implement integrated facilities for the use of renewable ocean energy (wave, currents and hybrid systems: wave/wind and currents/wind). Iberdrola will lead the project for 38 months (From 9/2009 to 12/2012). The eligible budget is 29.75 million euro (39.9 million USD) and the grant approved is 14.68 million euro (19.7 million USD).

The Partnership of the project includes Iberdrola Ingenieria y construcción SAU, Acciona Energía S.A, Areva, Igeotes,Gmv Sistemas, Ibaia, Iberdrola Renovables, Idesa, Ingeteam, Norvento S.L, Nem Solutions, Oceantec, Praesensis S.L:,Proes, Prysmian Cables, Seaplace, Sener Sistemas, Tecnoambiente, Taf and Vincinay Marine Innovations.

The Azimut project will generate knowledge to achieve new large wind turbines (15 MW) for offshore wind farm applications that will overcome challenges like efficiency, availability, cost of energy, and capital cost.

Gamesa will lead this project with an eligible total budget of 25.1 million euro (33.7 million USD) and approved grant of 11 million euro (14.8 million USD) (43.71%). The industrial consortium includes wind turbine manufacturers (Gamesa, Acciona Windpower, Alston Wind); wind farm owners; utilities like Iberdrola; individual industrial developers (Acciona Energia); and industrial suppliers (Ingeteam, Ingeciber, Técnicas Reunidas, Imatia, Digsilent, Tecnitest).

The research centers subcontracted are Cener, Tecnalia Corp (Robotiker, Inasmet), Ikerland, Irec, Csic-IcMab, Aimplas, Circe, Eupla, Catec, Cehpar, Imdea, and IIT. The Universities subcontrated are Universitiy of Coruña, University of Cantabria, Politechnical University of Madrid, and University of Valencia.

The “support actions” subprogram funds the Spanish Wind Power Technological Platform REOLTEC. REOLTEC has an important role in the coordination and definition of Spanish R&D activities in wind energy. REOLTEC was created with the support of the Spanish
Ministry of Education and Science as a place for exchange of ideas among all Spanish R&D entities to define priorities.

In addition, it establishes procedures for optimizing the acquisition of forecasted results, and it establishes priorities in wind energy R&D to advise the government. Those priorities are studied by working groups that focus on wind turbine technology, wind resources and site assessment, grid codes, certification and standardization, offshore wind farms, applications, environmental affairs, and social acceptance studies.

The INNPLANTA Program, managed by the Ministry of Science and Innovation (MICINN), also funds some projects. One project will foster the development of a new, highly complex technology for deep-water offshore wind turbines that will allow installation of wind farms far enough from the coast to avoid visual impact on the landscape. The budget was 70 million euro (94.1 million USD) and the grant 12.5 million euro (16.8 million USD). Collaboration agreements have been signed with Iberdrola, Enel, Alstom, Acciona, FCC, Prysmian, EDPRE, Gas Natural Fenosa, Gamesa, Siemens, Comsa Emte, Enerfín, Vortex, Normawind, and Barlovento.

In relation to new infrastructure for research purposes two new facilities are under development: CENER New experimental onshore wind farm. This new test facility operated by the National Renewable Energy Centre CENER is located in Aoiz (Navarra). The topography is defined as complex terrain and there are six calibrated positions to install prototypes of large wind turbines up to 5 MW each (separation 280 m), and five additional meteorological towers, 120 meters high. The main purpose of this facility is prototype testing and certifying wind turbines. The farm has continuous operation measurement instrumentation, offices for clients, and meeting rooms. It has been carefully studied, characterized, and analyzed to offer the best conditions for prototypes.

ZÈFIR Offshore Test Station (IREC). This new offshore test station is still under development by the Catalonia Institute for Energy Research (IREC). This activity will develop and set up a deep-sea offshore Wind Turbine Test Station off the coast of Tarragona (Spain). The test station will serve as a laboratory for testing new technology required in this field so that it can be marketed. This important initiative will stimulate the collaboration between major research centers, the industry and universities.

The development is structured in two phases:

Phase 1: Four bottom-fixed wind turbines will be installed with a maximum total capacity of 20 MW, 3 km off the coast and at 40 m water depth. Construction is planned for Q4 2012.

Phase 2: Eight wind turbines will be installed using floating technology with a maximum total capacity of 50 MW, 30 km off the coast, at 110 m water depth. Construction is planned for Q4 2012.

Spain is active in international research efforts and bilateral agreements. The government R&D program supports experts in Spain who lead IEA Wind Task 11 Base Technology Information Exchange and Task 27 Labeling Small Wind Turbines. A new task lead by Spanish experts in wind flow modeling in complex terrain is under development.

Expectations for the Spanish wind energy industry for 2011 are not very optimistic. The slowdown in 2010 was caused by funding problems related to the financial crisis and by the Register of Pre-Assignment, created by the central government to control more precisely the RES capacity growth. Wind power was included mainly because of the high fed-in tariff cost, and also because of some local grid integration constraints.

Electricity prices seem likely to be flat in 2010 and may not exceed 80 euro/MWh (107.5 USD/MWh) (especially if the contribution of hydropower to the system continues increasing and oil prices do not increase too much). During 2011, technology and installation costs are expected to be lower than 2010. With a joint effort of the transmission system operator, utilities, and the wind power sector, wind parks will continue to increase their contribution to meeting electrical demand.

The target defined in the PER 2005-2010 of 20,155 MW of wind power by the end of 2010 has been reached. A review of the support scheme has been done. The new NERAP 2011-2020 with new objectives and tariffs will be delivered during 2011. A realistic estimate for wind energy in Spain is that 35,000 MW of onshore and 3,000 MW of offshore wind farm capacity could be operating by 2020, providing close to 30% of Spain’s electricity.

The promotion of renewable energies has been a stable national policy for several years. All political parties have similar policies regarding support of renewable energies. The main tools within this policy at a national level are:

A payment and support mechanism enacted by the Parliament through Electric Act 54/1997: Producers of renewable energy sources are entitled to connect their facilities and transfer the power to the system through the distribution or transmission grid and receive remuneration in return.

The previous NREAP (2005-2010), which included midterm objectives for each technology, has been fulfilled. Until the new NREAP (2011-2020) is launched, the tariff schemes are guaranteed.

Royal Decree (RD) 661/2007 regulates the price of electricity from renewable sources in Spain. The new regulation has been in force since June 2007. Wind farm installations governed by previous regulations (RD 436/2004) had until January 2009 to decide whether they would continue to follow RD 436 or choose the new RD 661/2007.

Established a new mandatory instrument called “Pre-allocation Register” where all new promotions must be included before obtaining the required permit. This instrument aims to define the adequate RES progress taking into account, energy prices, electricity tariff deficit, and network capacity.

To facilitate the integration of wind energy into the grid, supplemental incentives are based on technical considerations (reactive power and voltage dips). These incentives apply only for existing wind farms (after January 2008 it is mandatory to satisfy Grid Code P.O.12.3).

Payment for electricity generated by wind farms in Spain is based on a feed-in scheme. The owners of wind farms have two options:

1. A regulated tariff scheme: payment for electricity generated by a wind farm is independent of the size of the wind power installation and the year of start-up. For 2010, the value was 77.47 euro/MWh (104.12 USD/MWh); the update is based on the Retail Price Index minus an adjustment factor.

2. A market option: payment is calculated as the market price of electricity plus a premium, plus a supplement, and minus the cost of deviations from energy forecasting. There is a lower limit to guarantee the economic viability of the wind turbines installations and an upper limit (cap and floor). For instance, the values for 2010 are reference premium 30.99 euro/MWh (41.65 USD/MWh), lower limit 75.41 euro/MWh (101.35 USD/MWh), and upper limit of 89.87 euro/MWh (120.79 USD/MWh).

A new Royal Decree 1614/2010, establish the review in terms of temporary limitation of the feed-in tariffs for the wind power installations included in the RD 661/227 for the period 1 January 2011 to 31 December 2012.

Finally a new small wind power systems grid connection requirements act and feed-in tariff for small wind energy is under discussion.

The economic slowdown has affected the wind energy industry toward the end of 2010. Also, a new mandatory instrument called “Pre-allocation Register” aims to define adequate RES progress taking into account, energy prices, electricity tariff deficit, and network capacity. As a result of this decision, wind turbines production is declining and more than 10,000 jobs have been lost.

The regulatory modifications have resulted in declining demand for wind turbines and consequently many companies have started job layoffs. Development in 2011 may be as low as 1,500 MW, the lowest figure since 2000.

The number of wind power installations during 2010 demonstrates the maturity of the wind energy industry, which has increased despite worldwide financial crisis and deployment of the Pre-allocation Register in Spain. Installing and operating wind farm plants to cover 16.4% of the Spanish electrical demand implies a huge accomplishment by the developers and manufacturers.

During 2010, the largest manufacturers were Gamesa (760.7 MW new wind farm capacity), Vestas (500.4 MW new wind turbines capacity), Alston Wind (141.78 new wind power capacity), and GE Wind (94.5 MW). In addition, some companies have appeared in the Spanish market like the German manufacturer Fülander with 12 MW or the Spanish SWEG (Former MTorres, now owned by an Egyptian industrial holding) with 6.6 MW.

Gamesa is still the top manufacturer in Spain with 11,108.07 MW total wind farm capacity installed, although in 2010 was the first time 100% of its sales were outside Spain. In the second position is Vestas Windpower with 3,528.72 MW total wind turbines capacity installed, and Alston Wind moved into third place with 1,559.85 MW.

Several new manufacturers are developing small wind turbines from 3 kW to 100 kW for grid-connected applications, and two manufacturers are working on new mid-sized wind turbine prototypes in the range from 150 kW to 300 kW.

Iberdrola Renovables, the largest Spanish utility, has the largest accumulated wind farm capacity (5,168.50 MW) thanks to the addition
in 2010 of 289.22 MW. However, the company installed more than 1,780 MW outside of Spain, with 39 new wind farm installations in eight countries.

Acciona Energy, in second place, has accumulated wind farm capacity of 4,036.82 MW with little new capacity (40 MW) in 2010. The Portuguese EDPR, with 1,862.92 MW total, installed 249.78 MW during 2010. The Spanish property group Govade installed 232.52 MW and several other developers have installed wind power capacity during 2010.

The number of wind turbines in Spain increased by more than 882 in 2010, and the total number of wind turbines is more than 18,933 units. The average size of a wind turbine installed in 2010 was 1.85 MW.

Wind turbines operating in Spain show important seasonal behavior. Total electricity generated by wind farms was more than 42,702 GWh, and the equivalent hours at rated power were slightly higher than 2,000 hours for all of the wind farms. On several occasions during 2010, wind power exceeded previous historical instantaneous power peaks and maximum hourly and daily energy production.

On 9 November 2010 the most daily energy was produced, 315,258 MWh; this production covered 43% of the power demand of that day. Also in February there was a monthly maximum of generated wind power covering 21% of the demand for that month. However, the variability that characterizes this energy has led to extreme situations. On 9 November (3:35 am), 54% of total power demand was covered by wind energy, while on 26 June (10:32 am) only 1% of the power demand was covered by wind energy.

On the other hand, the high wind resource during the first quarter of the year forced some power curtailment during hours of low power demand, which means losses of 0.6% of yearly production.

Regulations for the grid code have been completed successfully. Every wind farm is assigned to a control center and only 30% of wind farm capacity has not complied with the low voltage ride-through equirement.

Wind energy costs

The increasing use of large wind turbines (2 MW of nominal power), the increasing prices of raw materials, the shortage of main components, and the excess demand for wind turbines have increased prices for wind power generators. The average cost per kilowatt installed during 2010 in Spain was about 1,250 euro/kW (1,680 USD/kW).

Installed wind farm capacity in Spain reached 20,676 MW in 2010 with the addition of 1,515.95 MW, according to the Spanish Wind Energy Association’s Wind Observatory.

Such smaller growth was expected after the 2,461 MW increases in 2009 in which companies made a big effort to keep the planned number of wind farms after spectacular wind power capacity growth in previous years. The 20,676 MW of capacity establishes Spain as the fourth country in the world in terms of installed capacity and reaches the 2010 objective (20,155 MW set by the Renewable Energies Plan 2005–2010). The total electricity produced from wind turbines in Spain in 2010 reached 42,702 GWh.

The creation of the new mandatory Pre-allocation Register by the Spanish central government has operated as a bottle neck to 2010 wind energy sector deployment.

Because of this, the wind farm capacity increase has been moderate compared with the last few years. The addition of 1,515.95 MW in 2010 is an increase of 7.9%. Electrical energy demand in 2010 was 259.94 TWh, an increase of 1.01% from 2009. Wind energy met 16.4% of this demand and was the third largest contributing technology in 2010. Other big contributors to the system were gas combined-cycle power plants (24.85% of total demand) and nuclear power plants (23.74%).

Wind power is a driving force for industrial development in Spain. In 2010, investment was more than 1,400 million euro (1,882 million USD), and about 50% of Spanish wind energy equipment production was dedicated to the export market. But the Spanish Wind Energy Association (AEE) warns that a wind power industry slowdown will be caused by the Register of Pre-Assignment by the Spanish government. In addition to this new requirement, uncertainty has been introduced because no regulatory framework has been established beyond 2013.

Also, the economic crisis has caused the suspension of orders and the loss of jobs mainly in the industrial sector. In 2011, according to sector forecasts, the industry will only install about 1,500 MW, the lowest figure since 2000. The Register of Pre-Assignment limits new wind farm capacity to 3,000 MW during the biennium 2011-12. But possibly the worst news for the sector, whose projects take five to eight years to realize, is that after 31 December 2012, it is not known if facilities shall receive remuneration, which will slow the installation of wind farms for the future.

In conclusion, it will be necessary to clarify the future regulatory framework in the wind power sector without further delay if Spain is to reach 38,000 MW in 2020, the goal of the NREAP sent by the Spanish government in Brussels last June.

The objective for 2010 established in the Spanish NREAP 2005-2010 has been reached and even exceeded. A new NREAP 2011-2020 is under development by the Spanish Ministry of Industry, Commerce and Tourism. The targets drafted in this plan were to add 35,000 MW onshore, with 34,630 MW for new large wind farms and repowering old wind farms and 360 MW for small wind (wind turbines up to 100 kW rated power) and finally 3,000 MW should be dedicated to offshore wind farms. This last figure is still under debate because of the difficulty to promote offshore wind farms in Spain. The difficulties include lack of adequate electrical infrastructure near shore, excessive requirement of permits, deep marine platforms required, low social acceptance, clash of interest, etc. The aim of this new plan is to meet at least 20% of total energy use from renewable sources by 2020.

The electrical generation capacity in the Spanish mainland system increased more than 3,717 MW during 2010 for a total of 97,447 MW according to the data of Red Eléctrica de España REE (the Spanish TSO). Wind power and gas combined cycle were the technologies that contributed most to this growth.

With more than 20,676 MW of wind power installed, more than 18,933 wind turbines are operating in Spain, grouped among 889 wind farms. The average size of an installed wind farm in 2010 was 26 MW. Wind energy is present in 15 of the 17 autonomous communities. Castilla–Leon has the most installed power among them, with 4,803.82 MW. This autonomous community has had the biggest growth with 917.02 MW added in 2010, and it has a wind farm capacity forecast of 6,898 MW including the wind farms already under construction once the administrative permit goes into operation.

Catalonia experienced 62.32% growth, the second biggest, with 326.87 MW installed in 2010. It has 851.41 MW of total capacity installed. The third biggest growth has been in Murcia with 24.69% (37.60 MW) reaching 189.91 MW. With only 6 MW of new capacity installed in 2010 in Castilla-La Mancha region, it stays in second place with total capacity of 3,709.19 MW.

This autonomous community approved a new so-called “wind decree” in 2010. It is similar to the regulation already approved in Galicia, which establish a new tax on wind farms developers (different tax depending on the number of wind turbines included in the wind farm) with the compensation based on territory and visual impact produced by the wind farms. The autonomous government estimates that during the first year of operation the permit fees will raise about 15 million euro (20.2 million USD).

Castilla-La Mancha is followed by Galicia, which added 54.8 MW for a total of 3,298.33 MW and Andalucía which added 139.41 MW for a total capacity of 2,979.33 MW. Only two autonomous regions, Extremadura and Madrid, have not yet installed any wind power capacity.

However, they have advanced projects and regulation to start wind energy activities, especially Extremadura region. It should be noted that unlike many other countries with significant wind power development, Spain has increased its distribution throughout the country. Use of wind power has lowered CO2 emissions by about 23 million tons just during 2010. Furthermore, wind turbines generation has saved up to 8.5 million tons of conventional fuels and has supplied the electrical consumption of more than 13.5 million households.

By Enrique Soria Lascorz, Asociación Empresarial Eólica (AEE, the Spanish Wind Energy Association),  Ignacio Cruz, CIEMAT, SpanishMinistry of Science and Innovation.