Cepsa and Masdar ink agreement for 600 MW of renewables in Iberia

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Energy giants Abu Dhabi Future Energy Company (Masdar) and Cepsa have signed a partnership agreement for the development of 500-600 MW of wind and solar capacity on the Iberian peninsula. Both companies are wholly owned by Abu Dhabi’s sovereign wealth fund the Mubadala Investment Company.

Spain and Portugal are being lauded as hot renewables markets for 2019. A policy u-turn by Spain’s new government which abolished the solar tax and committed to installing more renewable capacity last year put the nation back on the list of candidates to be Europe’s solar king. A range of large-scale PPAs – many apparently subsidy free – have caught the industry’s attention.

The announcement regarding the partnership agreement was made on the margins of this week’s Abu Dhabi Sustainability Week.

Cepsa CEO Pedro Miró said at the signing ceremony: “After the initial phase of screening market access opportunities in several geographies, we have agreed Iberia to be the initial focus for our joint growth strategy. This step will allow us to combine synergies and expertise in one of the leading renewable markets in the world.”

Spain sets policy standard

Masdar is active in 25 countries and reportedly has nearly 4 GW of electricity generating capacity in operation or in development. Cepsa moved into the Iberian market in 2017 by acquiring the rights to its first wind project in Jerez de la Frontera, in Spain’s southern province of Cadiz, with project completion expected by April.

In November, Spain dramatically amended its Law on Climate Change to raise its 2030 carbon reduction ambition, and is now aiming for 90% fewer carbon emissions than it emitted in 1990, up from the previous 20% target. The government also committed to 100% renewable energy generation by 2050 and will need 50-60 GW of new solar to achieve that goal, amounting to an investment of around €70 billion.

Portugal also announced at the end of 2018 that it wants to generate 100% of its electricity from renewable sources by 2050.

“Portugal will achieve carbon neutrality by 2050, through the implementation of measures related to increasing electrification of the economy to 65%, solar energy production, reducing industrial emissions of greenhouse gases by 70% or urban waste areas by 25%,” the Portuguese government stated on December 5.

A previous agreement between Cepsa and Masdar, signed last January, foresaw the companies extending their cooperation not only in Iberia but also in the Middle East, North Africa, Latin America and other parts of Europe.