Sunday, September 04, 2005

Cabinet approves €23.6-bln renewable energy initiative

Cabinet approves €23.6-bln renewable energy initiative
Plan helps meet emissions cap obligations, government says

El Pais Spain | A. SIM

The Cabinet on Friday approved a new E 23.6-billion plan through to 2010 aimed at boosting the contribution of renewable energy sources to the country's growing power needs, and help meet its obligations to reduce greenhouse gases.

Presenting the plan, Deputy Prime Minister María Teresa Fernández de la Vega said the government wants 12.1 percent of overall energy needs to be met by renewable sources by 2010 and for those to supply 30.3 percent of total electricity consumption.

Fernández de la Vega said the previous plan introduced by the former Popular Party had failed to meet the initial forecasts for growth in the use of renewable energy, while primary energy consumption in Spain was growing above forecast. Only 28.4 percent of the target in the previous plan had been met by the end of 2004.

The focus on clean energy sources will help reduce Spain's reliance on oil imports - surging crude oil prices have helped swell the country's trade shortfall recently. Spain is also a signatory of the Kyoto Protocol, which seeks to reduce emissions of climate-warming gases such as carbon dioxide. The conversion of coal-fuelled electricity plants to installations using cleaner energy sources will help Spain fulfill its Kyoto commitments.

Another reason behind the need to increase the use of renewable energy sources is the Socialist government's commitment to gradually phasing out the use of nuclear energy.

The new plan calls for the energy sector to foot the bill for 77.1 percent, or €18.2 billion, of the total investment spending of €23.6 billion. Construction groups, financial entities and technology firms will be expected to contribute 20 percent, with the balance coming from the government.The government will also offer tax incentives for using motor fuels derived from vegetable matter and for the installation of electricity generation plants using renewable energy sources.

The plan places strong emphasis on the use of wind energy, but also covers other forms of renewable energy such as biofuels, biomas electricity plants, solar energy, and mini-hydroelectric plants.

Iberdrola, Spain's second largest electricity supplier welcomed the new initiative and said it planned to have 5,500 megawatts of installed capacity using renewable energy sources by 2008, an increase of 68 percent over the 3,280 MW it has at present. It said 1,220 MW of the planned additional capacity will be in Spain.

Endesa, the country's largest supplier, plans to invest €1.2 billion in Portugal and Spain in the period to 2005-2009, to increase its renewable energy capacity by 38 percent to 9,289 MW.

- Wind energy

The government raised the target for the installed capacity of wind-powered electricity plants to 20,155 MW, from 13,000 MW under the previous plan. The installed capacity of wind farms at the end of last year was 8,155 MW. Half of the €4.95 billion in tax breaks available for electricity plants using renewable energies will go to wind farms, which will be expected to produce 45,551 gigawatt hours.

- Biofuels

The use of biofuels such as bioethanol and biodiesel is expected to quadruple by 20010, to 2.2 million tonnes of oil equivalent from 500,000 at present. Biofuels will also be granted tax breaks worth €2.85 billion.
© 2005 El Pais