First Large-scale Solar Plants Without Subsidies Seen in Spain

By Mark Roca, Bloomberg
December 21, 2012  

 

LONDON -- Solar developers in Spain are trying to build Europe's first large-scale plants to sell electricity at market prices, taking advantage of a crash in equipment costs and some of the continent's highest levels of sunlight.

Builders have sought permits to connect 37.5 gigawatts of utility-sized projects to Red Electrica Corp. SA’s transmission grid, company spokeswoman Susana Moreno said. While demand studies show that’s far more new generation than the country needs, the first few plants could set a commercial precedent.

The companies include Gestamp Renewables Corp. and Solaria Energia Medio Ambiente SA, which only five years ago could earn about nine times more than fossil-fuel plants under one of the world’s most generous subsidy programs. As photovoltaic-panel prices tumbled, the aid was cut several times and altogether killed in January amid criticism in Parliament for adding more than 2.5 billion euros ($3.3 billion) a year to consumer bills.

“Spain is probably set to have Europe’s first utility- scale solar parks without subsidies” according to Jenny Chase, the Zurich-based head of solar energyanalysis at Bloomberg New Energy Finance.

Solar cell prices have plunged about 67 percent in the past two years as Chinese manufacturers led by Suntech Power Holdings Co. ramped up production quicker than demand. The top five makers of traditional silicon-based solar cells expanded output by 55 percent on average last year, according to data compiled by New Energy Finance, an affiliate of Bloomberg News.

Solar Pioneers