From: Reuters
Published February 26, 2008 10:59 AM

Spain says to renew solar price premium scheme

MADRID (Reuters) - Spain plans to renew a scheme for paying special premiums to solar power producers beyond a September deadline but at a lower level, a government official said on Tuesday.

Enrique Jimenez, director of the government's Energy Diversification and Saving Institute (IDAE) said a new decree would be published before September.

Under the current scheme, producers receive a premium of about 44 eurocents per kilowatt hour generated by new solar plants, up to a cap of 1,200 megawatts of installed capacity.

"A new reduced premium will be fixed for a cap that will be extended beyond the current 1,200 MW," Jimenez told Reuters on the sidelines of an energy conference in Madrid.

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Jimenez said the new cap and premium would apply until 2010, when they would be reviewed again, with a view to expanding Spain's solar generating capacity to some 6,000 MW by 2020.

"The premium should be reduced gradually until solar power is as competitive as other technologies," said Jimenez, who described the current premium as "generous."

"The cap won't shoot up. It's not in the industry's interest to produce a glut of photovoltaic panels in a short space of time with no quality control," he added.

Spain's current installed capacity for generating solar power is about 600 MW, Jimenez said, but he expected the figure to rise to the current cap for premiums by the September deadline.

(Reporting by Martin Roberts; Editing by Anthony Barker)

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