Sector View - Letter From the President

"The Association is the main body for transmitting to the Administration
the existence of a highly professional sector"

"Wind power is the most developed of all renewable energy technologies and the one that can and should contribute most towards reaching the national objective of covering 12% of primary energy consumption from renewables by 2011"

Doubts and worries marked the start of 2004, both for the renewables sector in general and for the wind power industry in particular, as new regulation was then in the making, namely the Royal Decree (Real Decreto) 463/04. The regulation was eventually rubberstamped on 12 March. Towards the end of the year, expectation prevailed, following a change of government earlier in the year. The new government has decided to revise the renewable energies promotion plan (Plan de Fomento de las Energías Renovables). The revision includes a clear commitment to raising the wind power target, taking into account not only existing online capacity but also the sector’s excellent and fast response to all the initiatives and requests by the electricity operating system. The revision will also respond to investor demands regarding stability.The sector climate changed significantly in the second half of the year. The first half was marked by fears of not reaching the 13,000 MW installed wind capacity target for 2011. In contrast, at the time of writing, sector doubts have come to centre, instead, around the issue of a new wind target and by how much it can be raised.

Against this important backdrop of substantial change, PEE (Plataforma Empresarial Eólica) has not only played a leading role. It is also the main body for transmitting to the Administration the existence of a highly professional sector, possessing the technological and management capacity demanded by the new growth objectives. PEE stresses its firm commitment to assuming the challenge, from demands by both Europe and Spanish society, that wind power consolidate itself as one of the main technologies within the electricity supply mix. PEE was born of the need for a single platform unifying the voices of all sector players—hence the denomination ‘platform’. And the achievement of the goals set then are the reason for changing our name now. The new denomination, Asociación Empresarial Eólica (Wind Business Association), is a truer reflection of our identity and role. Weighing up last year’s performance, the association contributed considerably to the design of the new operating rules, bringing forward innovative ideas and economically viable solutions for the electricity system. As a result, the sector enjoys stability and long-term earnings’ visibility, which, combined with a reasonable rate of return on investment, have brought back confidence to investors. The clearly apparent dynamism of wind activity in Spain—now with the highest growth rate in the world—is directly linked to its adaptation to the new setting. The association has also entered into the technical aspects of wind power in order to further integrate this energy source in combination with conventional generation technologies. Two projects still in course stand out from the rest.

The first is the Exercise for Programming Electrical Production from Wind Power (Ejercicio de Programación de la Producción Eléctrica de Origen Eólico), a pioneering initiative globally that will enable us to fine tune and optimise the wind forecasting tools currently available. With these tools, the sector has at its disposition the basic elements for making offers on the electricity market and for collaborating more intensely in the correct working of the electricity system. The second outstanding project involves the dynamic studies of grid stability, carried out in conjunction with the system operator. The studies will identify the protections and behaviour that wind plant should have in order to respond positively to any sporadic situations of instability. Our organization, then, is working unfalteringly to demonstrate that wind power is a young but solid and reliable technology, perfectly capable of contributing significantly and efficiently to the country’s electricity supply. And this work, together with other factors—such as the enforcement of the EU energy directive, which confirms the route chosen in Europe for electricity sector growth— explains the current wind boom and the change in climate mentioned at the beginning of this letter.

Wind power is the most developed of all renewable energy technologies and the one that can and should contribute most towards reaching the national objective of covering 12% of primary energy consumption from renewables by 2011. By that year, wind power could cover 16% of national electricity demand, for which an installed capacity of 23,000 MW would be needed. The Spanish wind sector, with its production capacity, pace of investment and wind resource potential, is prepared for that figure. Important challenges and hard work await us ahead in order for wind power to become one of the main pillars within the generation mix of Spain, a country committed to sustainable development and with a lack of indigenous energy sources, with the exception of renewable sources. The wind sector and the Asociación Empresarial Eólica as its representative body,assume this task as the main objective for the year that has just
begun.

By Fernando Ferrando,
president of the Wind Business Association.