Spain suspends subsidies for more solar plants

MADRID Thu May 19, 2011 6:52pm BST

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MADRID (Reuters) - Spain's energy watchdog suspended subsidies to 143 solar plants on Thursday for failing to show they were up and running before a generous state support for the fledgling industry was slashed in 2008.

That added to 808 plants which have been provisionally suspended as part of a review of more than 9,000 plants under way since last year in one of the world's major solar producers, the National Energy Commission (CNE) said in a statement.

The CNE said the 143 newly suspended plants generated 90 megawatts between them, which compares to about 4,000 MW currently in service in Spain.

Spain suddenly became the world's biggest solar power market in 2008 as investors rushed to cash in on subsidies before the government capped them on September 30 that year.

Aid may now be paid to just 500 megawatts a year of new photovoltaic (PV) plants -- which directly convert sunlight into electricity -- down from about 2,400 MW built in 2008.

Spain obtains about 2 percent of its electricity from solar plants, which are mostly PV but also include concentrated solar power plants which focus the sun's rays to heat water and drive a conventional turbine.

Solar receives preferential "feed-in tariffs" designed to make it gradually competitive with power generated by burning gas or coal.

The CNE recalled 840 plants already reviewed had waived a premium of 475 euros ($677.5) per megawatt-hour, payable above market rates, and accepted one of 326 euros/MWh.

Spain's benchmark wholesale power market price on Thursday was 51.24 euros/MWh.

Spanish engineering company Abengoa is building what is set to be the world's biggest solar plant, a 250 MW CSP complex in Arizona.

(Reporting by Martin Roberts)