BMI View: We hold a bleak outlook for the Spanish non-hydropower renewables sector, as a history of retroactive subsidy cuts and limited visibility into future policy mean that investors will be cautious to enter the market. The PP party's inability to form a government after two elections cements this view, as the country will be unable to devise a new strategy for the sector until a new government can pass budgets in parliament.
|e/f = BMI estimate/forecast. Source: National sources, BMI|
|Generation, Non-Hydropower Renewables, TWh||68.570||75.180||73.610||74.220||74.950||75.760||76.610|
|Generation, Non-Hydropower Renewables, % y-o-y||-3.130||9.650||-2.090||0.820||0.980||1.090||1.110|
|Capacity, Non-Hydroelectric Renewables, MW||31,429.5||31,576.2||31,844.3||32,085.1||32,296.1||32,464.3||32,642.8|
|Capacity, Non-Hydroelectric Renewables, % y-o-y||0.4||0.5||0.9||0.8||0.7||0.5||0.6|
Latest Updates And Structural Trends
Spain is on the brink of having to embark on a third election - after the political impasse registered after the first election in December 2015 has occurred again after the second election in June 2016. While the People's Party (PP) increased their number of seats in , they did not manage to get a majority, despite the support of Ciudadanos (Citizens). The PP is therefore reliant on the socialists (PSOE) not blocking the formation of a new government, which to date looks unlikely. Our core view is that a 'grand coalition' eventually will be formed, which would erode PP's austere renewables policy somewhat. However, the policy uncertainty registered in the country, and the inherent instability of such a coalition, will dampen investor interest even should a new government be formed.
Abengoa, Spain's largest renewable energy company initiated insolvency proceedings in late November 2015. Over the last months, our outlook for the company has improved marginally as it continues divesting non-core assets and has reached a restructuring agreement with several creditors and investores. Specifically, Abengoa has negotiated a deal consisting of a EUR1.17bn cash injection from the likes of Centerbridge Partners, DE Shaw Group, Elliott Management, KKR Credit and Oaktree Capital Management - in return for a 50% stake in the company post-restructuring. Furthermore, a EUR307mn in new financial guarantees have been agreed from lenders including Banco Popular, Banco Santander, Bankia, CaixaBank and Credit Agricole Corporate and Investment Bank The restructuring plan will ensure that the company becomes more economically sustainable, but the company that will emerge will be a much smaller global renewables player.
Spain's renewable energy industry is one of the most developed in Europe and total installed renewables capacity is nearly 30.9 gigawatts (GW, BMI 2015 estimate) - the third highest in Western Europe after Germany and Italy. Additionally, the contribution made by non-hydro renewable electricity to Spain's total power mix is substantial (roughly 25%), but this amount fluctuates on a monthly basis, depending on climatic conditions, power demand and thermal power output. That said, the continued expansion of the sector is at a halt, due to retroactive subsidy cuts, limited capacity available at auctions and policy uncertainty in relation to Spain's inability to form a new government.
The Spain Renewables Report researched at source contains BMI Research's assessment of the current renewables market in Spain. The report also contains historical data together with forecasts to end-2018 covering electricity generation (TWh) and electricity capacity (MW).
The renewables sectors covered in the report include Wind, Solar, Geothermal, Tidal and Wave, and Biomass (See Table of Contents for exact coverage). The report also features details on government green energy agendas and funding opportunities, as well as presenting a detailed list of key renewables projects currently being planned or undertaken in Spain, their capacity, the timeframe of construction and their current status.
The report discusses the various energy policies currently in force, including targets, subsidies and the relevant infrastructure developments or limitations which might impact on renewables growth, analysing the potential effects of regulatory changes in conjunction with the background macroeconomic outlook. Finally, there is a general overview of the competitive landscape in Spain, together with a detailed summary of the main utilities and manufacturers present and their business operations.
BMI's Spain Renewables Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with unique independent forecasts and competitive intelligence on the Spain renewables industry.
- Benchmark BMI's independent renewables industry forecasts for Spain to test other views - a key input for successful budgeting and planning in the renewables market.
- Target business opportunities and risks in the Spain renewables sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in the country.
BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering the renewables market in Spain, regulatory changes, major investments and projects and significant multinational and national company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the renewables sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2010-2012) and forecasts to end-2018 for electricity generation (TWh) and electricity generating capacity (MW) for each individual renewables sector present in the country.
These in turn are broken down into:
Electricity Generation: Overall capacity (TWh), growth % change year-on-year, KWh per capita, % of Total Non-Hydropower renewables generation, % of total electricity generation.
Electricity Capacity: Overall capacity (MW), growth % change year-on-year, % of non-hydroelectric renewables capacity and % of total capacity.
These forecasts are in turn supported by explicit assumptions, in conjunction with analysis of the key risks to the main forecast.
Business Environment Rankings
BMI's Renewables Business Environment Rankings provide fully comparable Risk-Reward Rankings aimed at investors in the regional renewables market.
The rankings methodology makes sophisticated use of various industry, economic and demographic data point.