Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N1 Athens, 1 st March 2006 Wind Energy in Spain Status and Regulatory Framework Cayetano Hernández Gonzálvez IDAE – Renewable Energy Manager

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N2 Athens, 1 st March 2006 Table of Contents 1. Current Situation of Wind Energy in Spain. 2. Wind Energy Legislation in Spain. 3. Spanish Renewable Energy Plan (PER) 2005 – Wind Energy Area. 4. IDAE and the Wind Energy. 5. Summary.

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N3 Athens, 1 st March ,430 9,955 3,120 1,715 1,080 1,355 1, ,935 Wind energy capacity (MW) in the European Union (EU-25) - 31/12/2005 TOTAL EU-25 (ENDING 2005) 40,430 MW Source: EWEA and IDAE Provisional Data

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N4 Athens, 1 st March 2006 Development of Wind Energy in Spain (MW) TOTAL SPAIN (ENDING 2005) 9,955 MW Source: IDAE Provisional Data

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N5 Athens, 1 st March 2006 Yearly investment in the wind energy sector in Spain Source: IDAE Provisional Data

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N6 Athens, 1 st March 2006 TOTAL: 9,955 MW Accumulated installed capacity (MW) per technology (31-Dec-2005) Source: IDAE Provisional Data

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N7 Athens, 1 st March 2006 Wind Energy Legislation in Spain

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N8 Athens, 1 st March 2006 Electric Power Act (Law 54/1997, 27 November) Main aim: Full liberalisation of electricity market. Activities regulated by the Law: - System Management: Market Operator (OMEL). - Transport activity: System Operator (REE). Establishes:- Special Regime for renewable energy sources (< 50 MW). - Guaranteed grid access. - Producers not obliged to submit bids to the pool. - Premium price for electricity from RES. Market:Pool based system. Regulatory Independent body: National Electric Regulatory Commission.

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N9 Athens, 1 st March 2006 Royal Decree 436/2004 on Special Regime (12 March) Objective:- Legal and economic scheme for the Special Regime. - Consolidate the regulatory framework, giving stability and predictability to the system. Characteristics:- Feed-in tariff system. - Guaranteed along the life-time of RES installations. - Payment related to a “Reference Electrical Tariff”, with a regularized annual evolution. Methodology:- Two alternative options for the remuneration of kWh: 1. Direct sale to the distribution company: Regulated price, depending on the capacity and year of commissioning. 2. Open sale in the market: ‘Pool’ price + Premium + Incentive + Complements.

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N10 Athens, 1 st March 2006 Spanish Renewable Energy Plan (PER 2005 – 2010). Wind Energy Area

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N11 Athens, 1 st March 2006 Achievement of the overall target for RES: Contribution of 12% to primary energy supply by (Primary energy demand higher than previsions in previous Plan.) Updating of other European indicative aims: Directive 2001/77/EC (target for Spain): 29.4% of gross national electricity consumption, from RES by Directive 2003/30/EC: 5.75% of transport fuel needs to be met from biofuels by General environmental commitments (Kyoto Protocol, National Assignment Plan for Emissions Trading Allowances). Need for revision of preceding RES targets

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N12 Athens, 1 st March 2006 Approved by the Council of Ministers on 26 th of August Targets of PER In 2010, RES will represent: – – 12.1% of total energy consumption, – – 30.3% of electricity production, In addition, biofuels will represent 5.83% of diesel and petrol consumption in the transport sector. Estimated investment for this period: 23, M€. In general, individual targets for each technology have been increased. Decisive role of wind energy. The Renewable Energy Plan (PER)

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N13 Athens, 1 st March 2006 Regulatory: Connection, network access and & operational conditions. Regulation of the guarantee of origin. Technical: Transport infrastructures. Behaviour of wind generators and farms with regard to the network. Reliability of wind prediction tools. Offshore wind farms. PER : Aspects to be improved in Wind Energy area

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N14 Athens, 1 st March 2006 Proposed Measures : Development of transport grid. Updating and improvement of the regulatory procedures regarding grid access and operating conditions. Establishment of a single operation centre for the Special Regime. Improvement of wind generators behaviour, regarding network. PER : Main measures in wind energy area

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N15 Athens, 1 st March 2006 Lines of technological innovation   Advanced systems to control the quality of the power fed into the grid.   Development of wind turbines with more than 2 MW. New materials. Offshore requirements.   Implementation of demonstration off-shore wind farms.

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N16 Athens, 1 st March 2006 Overall target (year 2010) 20,155 MW Increase of generated electricity (2010) 25,940 GWh/year Increase of primary energy (2010)2,230,840 toe/year Related investment ( )11,756 million € NO subsidies to investment. Emissions avoided (year 2010)9,649,680 t CO 2 Estimation of job creation: - Design and Construction34,680 jobs - Operation and Maintenance3,113 jobs Renewable Energy Plan (Wind energy area). Summary

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N17 Athens, 1 st March % 49% 10% Pending ( ) Previsions 2006 In operation (31/12/2005) Global Target (2010): 20,155 MW Source: IDAE Provisional Data Renewable Energy Plan (Wind energy area). Progress at the end of 2005

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N18 Athens, 1 st March 2006 IDAE and the Wind Energy Web IDAE:

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N19 Athens, 1 st March 2006 IDAE activities in the wind energy sector   Monitoring and analysis of the sector.   Promotional activities.   Collaboration with public bodies.   Participation in projects.   Technical consultancy.   International cooperation.

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N20 Athens, 1 st March 2006 IDAE´s Investment in wind energy area (updated Nov 2005) ECOTÈCNIA 1250 M TORRES 1500 LA FRAILA BAJO EBRO TRUCAFORT TARIFA LOS LANCES TARIFA 150/225/600 MADE 800 ALTOS DEL VOLTOYA I - IV CORRAL NUEVO LA MUELA II – III LA PLANA I SANCHO ABARCA GAMESA 850/2000 TARAZONA SUR MALPICA SOTAVENTO PEÑA GALLUDA MADE 800 SIERRA DE ASCOY LA UNIÓN PUNTA GAVIOTA MONTAÑA PELADA MONTAÑA FRANCISCO LA FLORIDA PENOUTA ES MILÁ EL ROMERAL

Wind Energy E U R O P E A N W I N D E N E R G Y C O N F E R E N C E & E X H I B I T I O N21 Athens, 1 st March 2006 Summary   New Target for wind energy: 20,155 MW (year 2010)   Second position world-wide with 9,955 MW installed at the end of   Spanish technologists among the ten largest manufacturers in   Stable legal framework: Feed-in Tariffs System, with premium price recognising environmental benefits.   IDAE participates with 276 MW in operation, and 57 MW under promotion.