MADRID, July 17 (Reuters) - Spain's government will ask the energy regulator to cut current subsidies to the solar power sector to curtail what it says is 'unsustainable' growth, an Industry Ministry spokeswoman said on Thursday.
A review of the current subsidy scheme is scheduled for publication in September and the National Energy Commission CNE has the final say.
The spokeswoman added that proposals, to be submitted to the CNE in the coming days, will seek to limit the amount of new solar capacity entitled to subsidies to 300 megawatts per year.
That compares with a current cap of 1,200 MW, for which solar power generators receive a subsidy of 0.45 euros ($0.713) per kilowatt hour (KWh).
Under the proposed scheme, due to come into effect on Jan. 1, 2009, 200 MW of the limit will apply to solar panels on buildings, with the remainder covering ground-based installations.
Subsidies will fall to 0.33 euros/KWh for roof installations and 0.29 euros. That compares with a market price <SP/BASE> of the equivalent of 0.69 euros/KWh for prompt delivery and 0.72 euros/KWh for delivery in 2009.
According to government forecasts, Spain's photovoltaic panels will have a total installed capapcity of 1,080 MW by September and 1,500 MW by the end of the year.
UNSUSTAINABLE
'By the end of this year, we will have beaten our targets for 2010 four fold, and that is not sustainable,' the spokeswoman said.
The government expects Spain to have a total installed capacity of 6,000-8,000 MW by 2020.
Solar power currently meets about 0.7 percent of Spain's demand for electricity, which on a typical working day is around 750 gigawatt hours.
Lured by the current subsidy scheme, lending to Spanish photovoltaic plants has risen to $3.59 billion in the year to date from $230.9 million in 2007 and $192.44 million in 2006, according to Reuters Loan Pricing Corp data.
Spain's government faces a ballooning tariff deficit due to generators having to sell much of their power below cost. The government has pledged to eliminate the deficit by 2011, but this year it is expected to rise to 4.85 billion euros, from 745 million last year.
Spanish solar power groups protested that government proposals will 'paralyse' the sector, and have lobbied for a cap of 600 MW.
Some of Spain's solar power producers are pinning their future on solar-thermal generators, which convert the sun's rays into heat, instead of photovoltaic panels, which turn solar energy directly into electricity.
Engineering firm Aries, for example, opened a 5 MW installation earlier this year but aims to launch a 230 MW solar thermal plant within four years.
(Reporting by Martin Roberts; Editing by Anthony Barker) ($1=.6309 Euro) Keywords: SOLAR SPAIN/ tf.TFN-Europe_newsdesk@thomson.com ak COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
A review of the current subsidy scheme is scheduled for publication in September and the National Energy Commission CNE has the final say.
The spokeswoman added that proposals, to be submitted to the CNE in the coming days, will seek to limit the amount of new solar capacity entitled to subsidies to 300 megawatts per year.
That compares with a current cap of 1,200 MW, for which solar power generators receive a subsidy of 0.45 euros ($0.713) per kilowatt hour (KWh).
Under the proposed scheme, due to come into effect on Jan. 1, 2009, 200 MW of the limit will apply to solar panels on buildings, with the remainder covering ground-based installations.
Subsidies will fall to 0.33 euros/KWh for roof installations and 0.29 euros. That compares with a market price <SP/BASE> of the equivalent of 0.69 euros/KWh for prompt delivery and 0.72 euros/KWh for delivery in 2009.
According to government forecasts, Spain's photovoltaic panels will have a total installed capapcity of 1,080 MW by September and 1,500 MW by the end of the year.
UNSUSTAINABLE
'By the end of this year, we will have beaten our targets for 2010 four fold, and that is not sustainable,' the spokeswoman said.
The government expects Spain to have a total installed capacity of 6,000-8,000 MW by 2020.
Solar power currently meets about 0.7 percent of Spain's demand for electricity, which on a typical working day is around 750 gigawatt hours.
Lured by the current subsidy scheme, lending to Spanish photovoltaic plants has risen to $3.59 billion in the year to date from $230.9 million in 2007 and $192.44 million in 2006, according to Reuters Loan Pricing Corp data.
Spain's government faces a ballooning tariff deficit due to generators having to sell much of their power below cost. The government has pledged to eliminate the deficit by 2011, but this year it is expected to rise to 4.85 billion euros, from 745 million last year.
Spanish solar power groups protested that government proposals will 'paralyse' the sector, and have lobbied for a cap of 600 MW.
Some of Spain's solar power producers are pinning their future on solar-thermal generators, which convert the sun's rays into heat, instead of photovoltaic panels, which turn solar energy directly into electricity.
Engineering firm Aries, for example, opened a 5 MW installation earlier this year but aims to launch a 230 MW solar thermal plant within four years.
(Reporting by Martin Roberts; Editing by Anthony Barker) ($1=.6309 Euro) Keywords: SOLAR SPAIN/ tf.TFN-Europe_newsdesk@thomson.com ak COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.