Wind of austerity chills Spanish turbine industry

Updated 15 July 2013

Wind of austerity chills Spanish turbine industry

AOIZ, Spain: Wearing face masks and wielding sanders, two workers smooth the surface of a massive fan for a wind turbine at the Gamesa factory in Aoiz, a town in Navarre, northern Spain.
But in hard times, it will be winds in Finland, not Spain, that make the finished product spin.
Last year, the plant delivered a wind turbine park to Malaga in southern Spain and another to Burgos, in the north, said factory manager Javier Trapiella.
"Now we don't produce for Spain," he added.
"It has all stopped."
For green energy producers, Spain has changed from a paradise with generous public support to a markedly less agreeable home.
Prime Minister Mariano Rajoy's conservative government is imposing an austerity regime to plug an accumulated energy sector deficit of 26 billion euros ($34 billion).
On Friday, the horizon darkened further with the approval of reforms cutting annual state aid for renewable energies by more than one billion euros.
The change is enough to place at risk huge strides in the Spanish wind energy industry.
Spain ranks as number four globally in terms of installed wind energy but has dropped to seventh place in terms of new projects, according to the Global Wind Energy Council.
"For Spain, wind energy has really been an energy revolution. In 20 years we have gone from producing zero kilowatts to producing 20 percent of national demand today," said Heikki Willstedt Mesa, director of energy policy at the Spanish Wind Energy Association.
In the fourth largest economy of the euro zone, wind is often the main source of electricity.
"Unfortunately, since 2009 the government has slowed the development of wind energy in Spain with various regulatory measures," he said.
Cuts in state aid of 35 percent, removing subsidies for new turbines since the start of 2013, and then the latest changes announced on Friday: The sector has been hit hard and manufacturers are the first to feel the pain.
In February, French group Alstom closed two factories in Spain and laid off 373 employees.
"The economic crisis and the absence of a stable regulatory framework have slowed domestic demand," the group said, stressing the lack of activity in its Spanish sites.
Spain's Gamesa, which is among the industry's world leaders, gave the same reasons as it laid off 606 of its 4,800 staff in Spain and closed two blade factories in recent months.
Gamesa notably pointed to the "regulatory uncertainty" , the persistent economic crisis and financial problems in the sector, especially in southern Europe.
Making a wind turbine is almost a work of craftsmanship, said Gamesa's Trapiella. "You need good hands," he said. The fiberglass and carbon fiber blades measure 62.5 meters (205 feet) and weigh 15 tonnes each.
When finished they will leave by truck overnight for the port of Bilbao to be shipped by sea to Finland. About 40 blades are scheduled for delivery by February.
"If 90 percent of our sales were in Spain 10 years ago, it is the exact opposite today with 90 percent of sales coming from abroad," said Jose Antonio Cortajarena, Gamesa's corporate managing director.
"We are in more than 50 countries," he said, citing Mexico, Brazil and India as key markets.
"Even if our corporate headquarters are in Spain, the risk, our dependance on the Spanish market, is limited."
The Spanish Wind Energy Association is not so reassured.
"We have destroyed 25 jobs a day in the wind energy sector since the start of the year and the industry is on the borderline, it cannot take any more cuts," it said.
The industry has already suffered heavily.
"Of the 43,000 jobs we had in the wind industry in 2009, there are only 23,000 left, said Sergio de Otto, secretary general of the business group Fundacion Renovables (Renewables Foundation).


Saudi energy giant to invest $3bn in Bangladesh’s power sector

Updated 22 October 2019

Saudi energy giant to invest $3bn in Bangladesh’s power sector

  • Experts say deal will usher in more economic and development opportunities for the country

DHAKA: Saudi Arabia’s energy giant, ACWA power, will set up an LNG-based 3,600 MW plant in Bangladesh after an agreement was signed in Dhaka on Thursday.

The MoU was signed by ACWA Chairman Mohammed Abunayyan and officials from the Bangladesh Power Development Board (BPDB), officials told Arab News on Monday.

According to the agreement, ACWA will invest $3 billion in Bangladesh’s energy development sector, of which $2.5 billion will be used to build the power plant while the rest will be spent on an LNG terminal to facilitate fuel supply to the plant. Under the deal, ACWA will also set up a 2 MW solar power plant.

In recent months, both countries have engaged in a series of discussions for investment opportunities in Bangladesh’s industry and energy sectors. 

During the Saudi-Bangladesh investment cooperation meeting in March this year, Dhaka proposed a $35 billion investment plan to a high-powered Saudi delegation led by Majed bin Abdullah Al-Qasabi, the Saudi commerce and investment minister, and Mohammed bin Mezyed Al-Tuwaijri, the Saudi economy and planning minister.

However, officials in Dhaka said that this was the first investment deal to be signed between the two countries.

“We have just inked the MoU for building the LNG-based power plant. Now, ACWA will conduct a feasibility study regarding the location of the plant, which is expected to be completed in the next six months,” Khaled Mahmood, chairman of BPDB, told Arab News.

He added that there are several locations in Moheshkhali, Chottogram and the Mongla port area for the proposed power plant.

“We need to find a suitable location where the drift of the river will be suitable for establishing the LNG plant and we need to also consider the suitability of establishing the transmission lines,” Mahmood said.

“It will be either a JV (Joint Venture) or an IPP (Independent Power Producer) mode of investment, which is yet to be determined. But, we are expecting that in next year the investment will start coming here,” Mahmood said.

BPDB expects to complete the set-up process of the power plant within 36 to 42 months.

“We are in close contact with ACWA and focusing on the successful completion of the project within the shortest possible time,” he said.

Abunayyan said that he was optimistic about the new investment deal.

“Bangladesh has been a model for the Muslim world in economic progress. This is our beginning, and our journey and our relationship will last for a long time,” Abunayyan told a gathering after the MoU signing ceremony.

Economists and experts in Bangladesh also welcomed the ACWA investment in the energy development sector.

“This sort of huge and long-term capital investment will create a lot of employment opportunities. On the other hand, it will facilitate other trade negotiations with the Middle Eastern countries, too,” Dr. Nazneen Ahmed, senior research fellow at the Bangladesh Institute of Development Studies (BIDS), told Arab News.

She added that Bangladesh needs to weigh the pros and cons before finalizing such contracts so that the country can earn the “maximum benefits” from the investment.

“It will also expedite other big investments in Bangladesh from different countries,” she said.

Another energy economist, Dr. Asadujjaman, said that Bangladesh needs to exercise caution while conducting the feasibility study for such a huge investment.

“We need to address the environmental aspects, opportunity costs and other economic perspectives while working with this type of big investment. Considering the present situation, the country also needs to focus on producing more solar energy,” Dr. Asadujjaman told Arab News.