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With GW-scale pipeline, Acciona swoops back into Spanish renewable market

Acciona SA is returning to Spain's wind and solar power market in a bid to profit from favorable regulatory changes and ambitious green energy goals by the renewable-friendly, Socialist-led government.

Addressing shareholders May 30 at the company's annual meeting, Executive Chairman and CEO José Manuel Entrecanales said Acciona already has 1,600 MW of projects with grid connection rights in Spain and plans to add another 400 MW to its development pipeline there in the next 18 months.

Raimundo Fernández-Cuesta, Acciona's director of mergers and acquisitions, had told analysts on a call May 10, "[We want] to take advantage of the expected growth and good opportunities in our home market during the next decade." He added, "We just know there's going to be a lot of investment, and we just want to be there."

The Spanish government plans to start annual auctions for about 3 GW of renewables, part of a range of environmental policies led by Prime Minister Pedro Sánchez that have buoyed investor confidence in the country's solar and wind sectors following years of drought caused by subsidy cuts under previous administrations.

The country now has a target to double wind capacity to 50 GW by 2030 and increase solar photovoltaic capacity sevenfold to 37 GW. The solar sector in Spain has already seen a strong revival, with developers taking advantage of declining technology costs and forecasts for rising power prices to build projects without subsidy support.

"What we have [now] is a much more clear picture in the policy that the government of Spain wants to pursue. And therefore, investments now make a lot of sense," Francesco Starace, CEO of Italy's Enel SpA, told investors during a capital markets day in November. Enel subsidiary Endesa SA, the largest electric utility in Spain, aims to develop 10% to 15% of the new capacity that will be developed in the country until 2030.

Fernández-Cuesta said Acciona's permitted projects were holdovers from before the "regulatory crisis" kicked off by previous Spanish governments. Although it includes a significant share of solar photovoltaic projects, the majority of the pipeline is made up of onshore wind plants, he said.

Acciona, once one of the largest renewables developers in Spain, scaled back activities there in recent years while expanding its other operations, which include water infrastructure and a services business.

The company sold five solar thermal plants in Spain to ContourGlobal PLC in February 2018, leaving it with only 3 MW of solar assets in the country. It also has an installed wind capacity of 4,740 MW and 876 MW of hydropower plants in Spain as well as another 4,010 MW of wind and solar assets in other countries.

In total, Acciona has 1,000 MW of renewable plants under construction around the world and another 7,500 MW under development — split almost evenly between solar photovoltaic and wind — in Mexico, Australia, Chile, the U.S. and Spain, Entrecanales said.