The region of Murcia not only has all the ingredients for meeting its own growing energy demands but is poised to supply electricity to other Spanish cities such as Barcelona, Valencia and Alicante. All-year-round sunshine and 250km of coastline provide the perfect conditions for wind turbines and solar plants. Add Cartagena to the equation – one of the largest liquefied natural gas (LNG) terminals in Europe – and the future looks extremely bright for Murcia.
This power production has the added value of being clean at a time when carbon credits are increasingly valuable and energy demands are being stretched to breaking point. Spain’s energy market is undergoing liberalisation ahead of the EU mandated schedule – domestic customers have been able to buy electricity from a preferred supplier since 2003.
Spain’s electricity market is the fifth largest in Europe and demand has grown rapidly, with a projected 30% rise in domestic demand by 2010. Following power shortfalls and price hikes in 2002, Spain’s ‘big three’ energy groups – Endesa, Iberdrola and Union Fenosa – decided on an ambitious construction programme of combined cycle, gas turbine (CCGT) power plants totalling about 26,000 megawatts (MW). Murcia was the obvious location and the region will see billions of euros of direct investment in energy from the rest of Spain and abroad over the next decade.
US energy giant AES was the first foreign company to propose a 1200MW combined cycle power plant fuelled by natural gas. Located in the Escombreras Valley, about 100km south of Alicante city, the country’s largest independent power project will see the US company invest €740m by the end of 2006.
The US-run power project will consist of three 400MW CCGT power stations, fully contracted for up to 24 years under the terms of a long-term energy agreement with the Gaz de France group, with fuel being imported through the Cartagena LNG terminal. The AES plant will provide much-needed power to Spanish consumers and open up sustainable development opportunities in the surrounding region.
Caravaca de la Cruz, in the northwest of Murcia, is set to become the new solar energy capital of Spain. Construction is under way on a 5MW solar tracking photo-voltaic plant. The plant is being developed by Soltec Energias Renovables, a Spanish company specialising in solar ‘turn-key’ projects (which is developing projects with similar technology around Murcia, each with power in excess of 1MW).
The new plant will cover an area of 350,000 square metres, incorporating 500 two-axis solar trackers that will follow the sun from sunrise to sunset. The design of the trackers and plant layout has been optimised to achieve a 40%-45% energy increase compared with the classic fixed panels and is expected to produce more than 10 gigawatt hours per year. Construction started in November 2005 and will be carried out in two phases, one of 2MW and a second of 3MW, expected to be completed by 2008. The 5MW project will help to achieve the 400MW objective for 2010 set by the Spanish government’s new renewable energy plan.
The Murcia plan is supported by the Spanish feed-in tariff obliging utilities to purchase electricity generated by renewable energy producers for the next 25 years.
Spain’s wind power industry turned in a record level of installation last year, leading the world for the first time and just pushing ahead of the previous leader, Germany. EHN, the renewable energy subsidiary of the Acciona Group, has already invested in 42MW of wind generation in Murcia, with more investment to follow.
Winds of change
Murcia is keen to attract as much renewable energy generation as possible and is tapping into the lucrative wind market where it is starting to catch up with other Spanish regions such as Galicia and Andalusia. Already some 140MW is being produced in Murcia between six wind farms.
New technology means that operating costs for wind power can be kept to a minimum and increasingly efficient storage and energy transport means greater profits. Investors are looking at Murcia’s wind market for safe capital investment with a relatively quick turnaround.
Murcia expects to see renewable energy account for 13% of the regional demand by 2012, with a total budget (2003-2012) of more than €1bn creating about 4,600 new jobs.