Iberdrola: Suddenly sour on solar thermal

3 November 2011

A blistering attack on Spain’s solar thermal sector has earned Iberdrola expulsion from the industry body Protermosolar. Why has the world’s largest renewable energy operator gone sour on CSP?

Ignacio Sánchez Galán, president, Iberdrola

By Jason Deign in Barcelona

Following Iberdrola’s analyst call on October 27, Spain’s concentrated solar power sector’s sentiment toward Ignacio Sánchez Galán could probably be summed up with the phrase: “with friends like these, who needs enemies?”

Sánchez Galán, head of Iberdrola, the world’s largest renewable energy operator and a member of the council of Spain’s solar thermal association Protermosolar, had laid into the CSP sector during the call. “The 2,500 MW of solar thermal plants already preregistered could result in an additional cost of €2 billion,” he claimed after trumpeting a 3.5% rise in company profits, to EUR€2.14 billion.

“The massive deployment of these plants at the moment has no justification. We must immediately stop the development of economically and environmentally inefficient energies. Someone has to pay for the green solar feast; we can’t carry on doing things for the few."

Leaving aside the recent research that clearly demonstrates how CSP could have a positive impact on the Spanish economy, this was an interesting turn of phrase for a leader who a couple of years ago was publicly very keen for his business to be one of the few partaking in Spain’s solar feast.

In 2009, Iberdrola put in about a dozen applications for CSP plants under the government’s pre-assignment plan. Not a single application got through, leaving the company with just one token facility, a 50 MW parabolic trough plant it had already built in Puertollano, Ciudad Real.

Over-capacity problems

However, Protermosolar’s general secretary Luis Crespo Rodríguez notes that the company was investing heavily in combined-cycle gas plants at the same time as its CSP ambitions were fading. And since Spanish utilities are obliged to buy renewable energy when it is available, increasing the amount of solar power in Spain could threaten to put the return on that investment in danger.

Crespo goes so far as to suggest that Iberdrola may be seeking to ‘paralyse’ Spain’s solar thermal sector in order to maximise the number of operating hours of its combined cycle plants. Iberdrola was contacted for comment, however declined to answer enquiries from CSP Today.

In fairness, Protermosolar had seen it coming. Iberdrola, whose leadership in green power is mainly based on wind and hydro resources, has long been critical of Spain’s photovoltaic sector and around a year ago its boss began grumbling publicly about CSP.

The industry body responded with a letter reminding Sánchez Galán of his duties as a Protermosolar council member - to little effect. The analyst meeting last month was the final straw. The following day, 17 of Protermosolar’s 19 remaining council members voted to expel Iberdrola, a move unprecedented in the history of the organisation.

Wind sector woes

But it is not only the CSP industry on the receiving end of Sánchez Galán’s ire. Iberdrola’s lead in the wind sector has recently slipped, causing the company to make waves for that industry, too, says Crespo.

According to Crespo, in a bid to protect its combined cycle plants Iberdrola is backing a proposed royal decree that would make it difficult for wind farm developers to access funding from banks. The end result, he explained, would be that fewer parks would get built; only the utilities with large bank balances would be able to finance wind power. Fewer wind parks, in turn, would increase demand and output of conventional energies.

As such, the question currently facing Spain’s renewable energy sectors is: just how big a threat do some of Spain’s major utilities present to near-term renewable energy deployment?

To respond to this article, please write to:

Jason Deign: jdeign@csptoday.com

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Rikki Stancich: rstancich@csptoday.com