Spain’s CSP market may not be entirely dead, but it is hardly a fertile hunting ground for new projects. So Spanish developers are looking abroad for new opportunities.
By Jason Deign in Barcelona
It is not exactly the best moment for renewable energy in Spain. The market that was just a few years ago leading the world in the development of green power is, at the time of writing, preparing for a hammer blow that many insiders feel will be the coup de grace for renewables.
Spain’s administration, struggling to contain a €25 billion gap between electricity costs and revenues (the so-called ‘tariff deficit’) amid one of the worst financial crises of its history, has signalled it will impose significant taxes on renewable energy production.
The levies come on top of important cuts in subsidies and will drive many projects to bankruptcy, according to the Renewable Energy Producers’ Association.
According to news reports, PV power production could be hit with a 19% tax, which would make most projects financially unviable. Wind power, which in April reached a monthly record production high of 5,000 gigawatt hours, covering more than a quarter of total electricity demand, is also reeling from the prospect of an 11% tax which would be added to levies it already pays in many autonomous communities.
CSP, meanwhile, is slated to get a 13% tax.
Protermosolar, the Spanish solar thermal industry association, stated its “total rejection and enormous concern over the possible introduction of an electricity generation tax based on billings which would be disproportionate, discriminatory and possibly unconstitutional.”
It could have been worse: Spain’s utilities had been trying to set the CSP sector up as a scapegoat for the entire tariff deficit. At least the tax might still leave projects with some chance of making a profit. That is as good as it gets, though.
One of the first actions of the incumbent leadership following its election last year was to slap an indefinite halt on new renewable energy projects from 2013. Now it seems that even if the moratorium is lifted, developers will not be able to expect much in the way of support.
This effectively leaves some of the most important CSP companies in the world, such as Abengoa, Acciona and ACS Cobra, without a home market. To their credit, these companies have lost no time in hawking their expertise abroad.
“Right now Spanish firms are making moves in practically all the CSP markets: South Africa, Morocco, USA, Middle East and North Africa, and India,” says Jorge Alcauza, of the press and communications department at Protermosolar.
“They are making contacts in the Latin American market, particularly Chile, as well as some early contact in China. Each company has an international growth strategy and is developing alliances.”
He adds: “South Africa is perhaps the market where there has been the greatest success; all the projects there are being led by Spanish companies, or they are at least in alliance with the promoters.”
Specifically, Acciona is part of a consortium led by ACWA Power of Saudi Arabia that last month emerged as the preferred bidder for the 50MW Bokpoort CSP plant in South Africa.
Previously, Abengoa had bagged the two CSP projects awarded in the first round of renewable energy bidding in South Africa: the 100MW KaXu Solar One parabolic trough plant and the 50MW Khi Solar One power tower.
Abengoa also has major interests in the USA, in the form of the Mojave Solar Project and Solana, both parabolic trough plants delivering 280MW apiece.
However, Andrew Stiel, a CSP analyst with Bloomberg New Energy Finance, believes the Acciona partnership with ACWA Power may be the one to watch in the future.
ACWA Power has been tipped to win the first phase of a 500MW solar plant planned for Ouarzazate, Morocco, in partnership with the Spanish engineering groups Aries Ingenieria y Sistemas and TSK Electrónica y Electricidad, and ahead of a consortium including Abengoa.
Stiel says there are suspicions Acciona may be involved in Ouarzazate, through ACWA. “That’s interesting because Saudi Arabia has also recently announced huge intentions for solar thermal,” he says.
“They forecast 25GW by 2032 and that is in a staged approach. They have already announced that they will be tendering for 900MW at the end of this year, beginning of next year, and then another 1,200MW the following year.
“ACWA Power is trying to build up expertise in CSP in anticipation of this, and to do so they have formed a consortium with Acciona.”
It probably does not hurt the Spanish companies that CSP firms elsewhere have either not yet really had a chance to develop a track record or, as is the case in Germany and the US, have been caught out by market volatility and consolidation.
Whether Spain’s CSP firms can maintain that lead with the opening up of new markets such as India and China remains to be seen. For now, though, Spanish CSP is alive and well… even if it is not in Spain.
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