VALUATION OF THE EFFICIENCY OF THE SUBVENTIONS GRANTED BY THE SPANISH PUBLIC AUTHORITIES FOR THE GENERATION OF ELECTRICITY FROM THE WIND ENERGY

Lucía Isabel García-Cebrián

Universidad de Zaragoza, (Spain) Dpt de Economía y Dirección de Empresas

Gran Vía, nº 2; 50.005 Zaragoza (Spain)

Tel: 34-976-76-10-00 ext. 4667 Fax: 34-976-76-16-67

e-mail: lgarcia@posta.unizar.es

Abstract

In the last years, the electric sectors of most of the countries have been put under reform processes whose more remarkable characteristic has been the introduction of the competition, at least in the activities of generation and commercialization of the electricity. The Spanish electric sector has not been out of this tendency. From the beginning of 1998, it is in march the electricity market, to which the generating companies of electricity (as sellers) and the qualified consumers (as buyers) go, and in that the price is formed in conditions of competition. It is certain that this is not more than the start of a reform that tries to go more far and to reach to all the consumers.

On the other hand, in the undertaken reforms the environmental preoccupation is present and they take into account the repercussions the use of the different primary energies can have on the environment. Authorities have paid attention to the renewable energies (sun, wind, biomass, etc.) because of the absence of polluting effects, and they have considered them like one more alternative at the time of determining the origin of the electric energy that is generated. Nevertheless, from a strictly economic point of view, the electricity obtained from the renewable energies has the disadvantage of the high costs of generation, which in principle would limit the possibility of its use in competitive surroundings like which is wanted to restore for the electric sector.

In an attempt to make compatible the use of energies that cause high costs of generation and the existence of a market of electricity that prioritizes the competitiveness, the authorities can use the subventions like a mechanism of incentive to the renewable energies. Evidently, in an ideal situation of competition the subventions would not take place. But, it is also certain that, in presence of externalities, the allocation of resources by means of the market presents consistent failures (fundamentally, in that the decisions that would take the agents taking care of criteria from private costs and benefits are not the best ones from the social point of view). In situations like the described one, the use of subventions is justified, and what it should be tried, is that these were efficient, that is to say, that they could obtain their objective without wastefulness of resources, or in other terms, to a minimum cost.

The aim of this paper is, therefore, the analysis of the efficiency of the subventions granted by the Spanish authorities, taking like efficiency criterion the exposed one previously. For it, the generation of electricity from the wind energy, which is subsidized in the Spanish electrical sector, has been taken as case study. The paper is going to have two parts clearly differentiated. In the first place, the criteria to consider at the time of justifying the necessity of the subventions will be exposed. Next, we will study what type of subvention is most efficient; for it, we will consider the economic and technical data of an existing wind power installation in Spain. A sensitivity analysis will be made in order to provide judgement elements to propose the form of the more convenient subvention, understanding by so, the one that reaches the aim of the authorities with the smaller cost.