Storm Moving on Spain’s Windmills to Slam Power Price

[Joanne98]

Feb. 6 (Bloomberg) -- Windmills owned by Iberdrola SA and Acciona SA, the world’s biggest operators, may generate a record amount of electricity in Spain next week that will slash local power prices, calculations from Bloomberg weather data show.

An Atlantic Ocean storm is forecast to blow winds averaging 17.6 miles an hour across the peninsula. Lighter breezes, at 13.6 miles an hour, were enough to set the previous record output three weeks earlier. The extra supply then cut power prices 11 percent.

“This will push the spot market lower next week,” Manuel Palomo, a Citigroup Global Markets analyst in Madrid, said in an interview. Palomo covers Spanish generators Iberdrola, Endesa SA and Acciona, which own or run wind farms in five continents.

Spain and Germany, the world’s biggest wind-energy markets after the U.S., have changed the dynamics for wholesale power trading by forcing sellers to read weather reports. Because their fuel is free, wind turbines undercut traditional generators that burn coal, natural gas and oil.

The wind-speed measurements are calculated from a composite of forecasts for Castile-La Mancha and other regions, weighted by Bloomberg in proportion to the number of turbines in each zone.

Wind has become a bigger factor in Germany and Spain because they both subsidize rates for the renewable energy and give producers preference to sell in wholesale markets. Utilities that acquire power, from Essen-based RWE AG in Germany to Union Fenosa SA in Madrid, must buy any available wind and solar power before tapping fossil-fuel plants.

Carbon Versus Wind

http://www.bloomberg.com/apps/news?pid=20601109&sid=am._.e2ASq2M&refer=home

[Renew Deal]

1. Is it possible to generate too much electricity?

:shrug:

[Joanne98]

2. NO! We want the price to go down.

[Renew Deal]

3. I'm not talking price

I'm talking capacity.