Spain: Wind hopes rest on election result


December 11, 2015

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On 20 December, the people of Spain are due to vote in one of the most significant elections in the country in decades. The result will also shape the future of Spain’s wind industry.

And it is set to be messy. The incumbent Popular Party is currently polling just below 30% of the vote, with three opposition parties — the Socialist Party, Podemos and Ciudadanos — on course to win 15%-30% each. That means that a coalition is almost guaranteed, with all the political uncertainty that brings. Energy policy is just one area that will be debated.

This should still be good for wind, though. All three opposition parties have spoken out in support of renewables including wind,
in contrast to the Popular Party’s plan to give more support for nuclear and coal. The policy differences could not be more stark.

If these pro-renewables parties can seize power then this should mean a move away from the anti-renewables approach of the Popular Party over the last three years. In June 2013, it brought in a law to end subsidies for wind farms commissioned before 2004; and, a year later, it set up a system to cap earnings from existing renewables projects. These policies have paralysed renewables in Spain and driven major changes among its biggest firms.

This has pushed Gamesa and Iberdrola to expand in overseas markets; has driven Abengoa into insolvency proceedings; and has forced Acciona to sell off its wind manufacturing arm to Nordex in a €785m deal. All huge changes. All forced upon them.

But electing a pro-renewables coalition would not necessarily bring major growth back to wind in Spain. It is not easy to entice back businesses who have been hurt before by policy changes and, even if they did want to do so, vital skills will have been lost.

There is also the economic issue that GDP is only growing slowly. Yes, 3.4% growth in the third quarter of 2015 was the strongest quarterly figure in eight years, but it does not make up for the flat or negative GDP growth between 2009 and 2013. We do not expect to see fast growth in energy use and so the wind sector will not be called on to fill that gap.

Finally, we have been hurt by ‘pro-renewables’ political parties before. In Greece, Syriza was in favour of renewables while in opposition but embraced fossil fuels in government due to their immediate fiscal concerns.You think Syriza is too niche? Okay, how about the UK’s Conservative Party which, ten years ago, was urging people to ‘vote blue, go green’ but is now taking an axe to wind and solar subsidies. ‘Green’ promises mean very little until we see the laws backing them up.

You see, it is very easy to be pro-renewables in opposition, but that does not guarantee pro-renewables policies in government. We welcome the fact that renewables are part of the election debate in Spain, but we should not allow ourselves to believe that a new government could magically banish years of problems for Spanish wind. It would be foolish to think that it could.

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