The Market in Spain.

Due to the excellent solar radiation conditions and the statutory feed-in tariffs, Spain is one of the most important markets for the realization of solar-thermal power plants today and the most important market for Solar Millennium thus far. In the last few fiscal years, Solar Millennium AG and its subsidiaries generated the majority of their sales on this market with project development of solar-thermal power plants, the sale of stakes in these power plants and the delivery of engineering and control components for the solar field.

Spain is the Mediterranean pioneer in creating the economic framework conditions for the operation of solar-thermal power plants. Construction of the first European parabolic trough power plant, the Andasol 1 power plant developed by Solar Millennium, commenced in the south of Spain in 2006. Today, this power plant, as well as its sister project Andasol 2, is in operation. Andasol 3 is scheduled to be connected to the grid in 2011. The first preparatory construction works were initiated at the end of 2010 for the fourth Spanish project developed by Solar Millennium, the Ibersol power plant. Solar Millennium AG is simultaneously pursuing additional projects in Spain, which are in different stages of development at present.

Given the annual direct normal radiation of more than 2,100 kWh per square meter in some cases, the south of the country is among the best regions for solar-thermal power plant locations in Europe. Moreover, the regions in question, namely Andalusia, Extremadura, Castilla-La Mancha, Murcia and Valencia, feature flat areas that are ideal for building parabolic trough power plants.

Thanks to its extremely advanced subsidization program, Spain is, at the same time, an attractive market for power from renewable energy sources. The royal decree, Real Decreto 661/2007, provides the economic basis via state-guaranteed feed-in tariffs. These tariffs rise under partial consideration of the annual inflation rate. In May 2009, the Spanish legislative authorities reorganized the selection of projects that were approved in the first phase by updating Real Decreto 661/2007 with Real Decreto Ley 6/2009. According to this, a project has to meet certain criteria in order to receive pre-registration for the Spanish power plant registry. Current legislation only guarantees the statutory feed-in tariff for pre-registered projects if the power plant is completed within a defined period of time.  The guidelines for the Spanish subsidization policy are governed by the political subsidization plan “Plan de Fomento de Energías Renovables (PER) 2005-2010.” An update of reimbursement structures for the subsequent period (2011-2020) is under way.

The enormous potential and the favorable economic framework conditions have sparked the interest of Spanish utilities in solar-thermal power plants and have resulted in the market entry of additional companies. Solar Millennium is represented on the Spanish market by its own subsidiary, Milenio Solar Desarrollo de Proyectos S.L.