1. Wind Energy 2 0 0 6 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

2. Wind Energy 2 0 0 6 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 – 2010. Wind Energy Area. 4. IDAE and the Wind Energy. 5. Summary.

3. Wind Energy 2 0 0 6 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 2006 18,430 9,955 3,120 1,715 1,080 1,355 1,020 820 2,935 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

4. Wind Energy 2 0 0 6 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

5. Wind Energy 2 0 0 6 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

6. Wind Energy 2 0 0 6 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

7. Wind Energy 2 0 0 6 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

8. Wind Energy 2 0 0 6 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.

9. Wind Energy 2 0 0 6 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.

10. Wind Energy 2 0 0 6 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

11. Wind Energy 2 0 0 6 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 2010. (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 2010. Directive 2003/30/EC: 5.75% of transport fuel needs to be met from biofuels by 2010. General environmental commitments (Kyoto Protocol, National Assignment Plan for Emissions Trading Allowances). Need for revision of preceding RES targets

12. Wind Energy 2 0 0 6 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 2005. Targets of PER 2005-2010. 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: 23,598.64 M€. In general, individual targets for each technology have been increased. Decisive role of wind energy. The Renewable Energy Plan (PER) 2005-2010

13. Wind Energy 2 0 0 6 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 2005-2010: Aspects to be improved in Wind Energy area

14. Wind Energy 2 0 0 6 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 2005-2010: Main measures in wind energy area

15. Wind Energy 2 0 0 6 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.

16. Wind Energy 2 0 0 6 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 (2005 - 2010)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

17. Wind Energy 2 0 0 6 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 2006 41% 49% 10% Pending (2007-2010) 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

18. Wind Energy 2 0 0 6 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: www.idae.es

19. Wind Energy 2 0 0 6 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.

20. Wind Energy 2 0 0 6 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

21. Wind Energy 2 0 0 6 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 2005.   Spanish technologists among the ten largest manufacturers in 2005.   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.