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Interest in renewable power projects in Spain is booming: IHS
Markit expects that 2 GW of onshore wind and 4 GW of solar capacity
will have been added over the course of 2019. Next year is shaping
up to be equally dynamic with a further 2 GW of wind and 3 GW of
solar capacity set to increase Spain's already large renewable
installed capacity. Many projects are being financed with power
purchase agreements (PPAs) allowing project developers to secure
finance outside of the government's auction schedule.
Despite all this, a dark cloud hangs over the market. Spain is
getting ready for its fourth election in four years. Successive
governments have been unable to secure a working majority, and
unable to push through laws necessary for the transformation of the
power sector. This political uncertainty is a significant concern
for thermal assets but also - crucially - for renewable project
developers mindful of the cannibalisation effect associated with
large renewable additions which could jeopardise PPA-driven
additions.
Figure 1: Aiming high: Expected surge in Spanish
renewables
