Wind of austerity chills Spain’s turbine sector

July 20, 2013 by  
Filed under Green Energy News

Wearing face masks and wielding sanders, two workers smooth the surface of a massive fan for a wind turbine at the Gamesa Corporacion Tecnologica SA factory in Aoiz, a town in Navarra, northern Spain.

Yet as the country experiences hard economic times, it will be winds in Finland, not Spain, that make the finished product spin.

Last year, the plant delivered a wind turbine park to Malaga in southern Spain and another to Burgos, in the north, factory manager Javier Trapiella said.

“Now we don’t produce for Spain,” he added. “It has all stopped.”

For “green” energy producers, Spain has changed from a paradise with generous public support to a markedly less agreeable home.

Spanish Prime Minister Mariano Rajoy’s conservative government is imposing an austerity regime to plug an accumulated energy sector deficit of 26 billion euros (US$34 billion).

On Friday, the horizon darkened further with the approval of reforms cutting annual state aid for renewable energies by more than 1 billion euros.

The change is enough to place at risk the huge strides made by the Spanish wind energy industry.

Spain ranks No. 4 globally in terms of installed wind energy, but has dropped to seventh place in terms of new projects, according to the Global Wind Energy Council.

“For Spain, wind energy has really been an energy revolution. In 20 years, we have gone from producing zero kilowatts to producing 20 percent of national demand today,” said Heikki Willstedt Mesa, director of energy policy at the Spanish Wind Energy Association.

In the fourth-largest economy of the eurozone, wind is often the main source of electricity.

“Unfortunately, since 2009 the government has slowed the development of wind energy in Spain with various regulatory measures,” he said.

The cutting of state aid by 35 percent, removal of subsidies for new turbines since the start of the year and the latest changes announced on Friday have hit the sector hit hard and manufacturers are the first to feel the pain.

In February, French group Alstom SA closed two factories in Spain and laid off 373 employees.

“The economic crisis and the absence of a stable regulatory framework have slowed domestic demand,” the group said, stressing the lack of activity in its Spanish sites.

Spain’s Gamesa, which is among the industry’s world leaders, gave the same reasons as it laid off 606 of its 4,800 staff in Spain and closed two blade factories in recent months.

Gamesa notably pointed to the “regulatory uncertainty,” the persistent economic crisis and financial problems in the sector, especially in southern Europe.

Making a wind turbine is almost a work of craftsmanship, Trapiella said.

“You need good hands,” he said.

The fiberglass and carbon fiber blades measure 62.5m and weigh 15 tonnes each.

When finished they will leave by truck overnight for the port of Bilbao to be shipped by sea to Finland. About 40 blades are scheduled for delivery by February next year.

“If 90 percent of our sales were in Spain 10 years ago, it is the exact opposite today, with 90 percent of sales coming from abroad,” Gamesa corporate managing director Jose Antonio Cortajarena said.

“We are in more than 50 countries,” he said, citing Mexico, Brazil and India as key markets. “Even if our corporate headquarters are in Spain, the risk, our dependence on the Spanish market, is limited.”

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