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Cablegate: Embassy Madrid Proposal for U.S.-Spain Renewable

VZCZCXYZ0000
RR RUEHWEB

DE RUEHMD #1823/01 2621624
ZNR UUUUU ZZH
R 191624Z SEP 07
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 3452
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
INFO RHEHNSC/NSC WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS MADRID 001823

SIPDIS

SIPDIS

STATE FOR EUR/WE, EUR/PGI, EEB, OES/EGC, OES/ENV, OES/OGC,
OES/PCI, OES/PD
DOE FOR SECRETARY BODMAN'S OFFICE
DOE ALSO FOR EERE:KARSNER,MIZROCH,DICKERSON,CHIANG
AGRICULTURE FOR JOHN NUTTAL
COMMERCE FOR 3133/ITA/USFCS/OIO/EUR, 4211/ITA/MAC/EUR,
6110/ITA/MAS/ENERGY
PASS USAID FOR EGAT, EE
PASS EPA FOR OIA:MARTIN DIEU
PASS PRESIDENT'S COUNCIL ON ENVIRONMENTAL QUALITY

E.O. 12958: N/A
TAGS: BEXP ECON ENRG EINV KGHG KPAO SENV SP
SUBJECT: EMBASSY MADRID PROPOSAL FOR U.S.-SPAIN RENEWABLE
ENERGY COOPERATION INITIATIVE


1. Summary: Consistent with our Mission Strategic Plan,
Embassy Madrid is launching an initiative to increase
linkages between Spanish and U.S. government and private
sector leaders in the area of renewable energy. Spanish
firms are world leaders in renewable energy technology, and
there is increasing interest among U.S. and Spanish officials
in broad and deep cooperation on renewables issues. One
step we are considering is to organize a Spanish
government/private sector delegation to Washington - possibly
to participate in the USG-cosponsored March 2008
International Renewable Energy Conference - and to Colorado
for meetings at the National Renewable Energy Laboratory.
Para 11 contains an Action Request for addressees to comment
on post,s ideas and suggest additional ways to increase
linkages. End Summary.

------------
Introduction
------------

2. Building on a strong, mutually beneficial bilateral
relationship, Embassy Madrid intends to deepen our level of
cooperation with the GOS and the Spanish business community
in the area of renewable energy. As identified in Post,s FY
2009 Mission Strategic Plan, collaboration on energy is a
policy priority that the Mission is working to make a pillar
of the bilateral economic relationship. Spanish firms are
among the world leaders in wind and solar technology, and
there already are some bilateral investments in both
directions.

--------------
U.S. Interests
--------------

3. A U.S.-Spain renewable energy cooperation initiative will
support U.S. interests and policy goals by:
- enhancing U.S. energy security,
- advancing the President,s May 31 climate change initiative,
- advancing the President,s "20 in 10" plan to reduce
gasoline consumption by 20% over 10 years,
- promoting economic growth and stability,
- supporting the U.N. Framework Convention on Climate Change,
the U.S.-EU Framework for Advancing Transatlantic Economic
Integration and the establishment by 2008 of long-term goals
for reducing greenhouse gas emissions,
- demonstrating publicly the USG,s commitment to addressing
climate change, and
- providing commercial and economic benefits to both
countries.

--------------------------
Private Sector Investments
--------------------------

4. The U.S. and Spain already enjoy strong energy
collaboration within the private sector. Over the past few
years, the Spanish private sector has significantly increased
its investment in the U.S. renewable energy industry. These
investments include acquisitions of a regulated U.S. utility
company in Maine, wind generation capacity in Pennsylvania,
West Virginia, Iowa, and Virginia, wind turbine manufacturing
facilities, and one of the largest solar energy generating
facilities in the world in Nevada. New acquisitions and
projects are announced frequently.

5. While much of Spain,s foreign direct investment in the
U.S. has been targeted toward wind power, other types of
renewable energy are important in Spain as well. Industry
reports have named Spain the world,s most attractive solar
market, with government subsidization of solar plants and new
building codes requiring the use of solar panels on all new
and renovated buildings nationwide. With respect to
biofuels, the GOS recently passed a new law making the
E.U.,s non-binding target of 5.75 percent biofuel usage in
transport fuels mandatory by 2010. As a result, plans for
numerous biodiesel plants within Spain have been announced
recently. Spain has also established a target of having

12.1 percent of its total energy consumption come from
renewable sources by 2010. Spain,s expected failure to meet
its 2012 Kyoto Protocol targets for CO2 emissions is likely
to increase interest in renewables.

-----------------------------
Energy Cooperation Initiative
-----------------------------

6. Although private sector collaboration and investments are
growing, the U.S. renewable energy market remains relatively
underdeveloped. Additionally, achieving both the USG,s and
GOS, aggressive goals of reducing greenhouse
gases and pollution, combating global climate change,
increasing the use of biofuels and reducing the use of fossil
fuel energy consumption will require significant
breakthroughs in science and technology, according to the
President,s Council on Environmental Quality. Finally,
local and national level environmental regulations are
rapidly evolving in both countries.

7. The Mission,s view is that by creating a dialogue and
open exchange between various U.S. and Spanish stakeholders
including government, industry, capital markets, and science
and research communities, we can contribute to
breakthroughs that lead to development of these additional
opportunities in renewable energy.

8. Our proposed U.S.-Spain renewable energy cooperation
initiative will be concentrated in three primary areas:

- Encouraging further private sector investment in the
renewable energy sector in both countries,
- Expanding the generation and consumption of renewable
energy in both the U.S. and Spain, and
- Encouraging additional science and technology research and
development to achieve breakthroughs in our collective
efforts to reduce fossil fuel energy consumption.

--------------------------------------------- --
GOS Interest and Existing Bilateral Cooperation
--------------------------------------------- --

9. GOS officials from several agencies, including the
Ministries of Industry & Commerce, Foreign Affairs,
Environment, and Housing, have expressed interest in greater
US-Spanish cooperation on renewable energy issues. Some
government-to-government cooperation already is taking place.
For example, DOE,s National Renewable Energy Laboratory is
discussing research with Spanish firms and institutions. The
Housing Ministry is negotiating with DOE,s Office of Energy
Efficiency and Renewable Energy to bring to Spain a European
version of DOE,s biennial Solar Decathlon competition in
which university students compete to design and build houses
powered by solar energy. The Spanish university entry in
this year,s competition has been visited by President
Zapatero and the Ministers of Industry & Commerce and
Environment. Renewables also are an area of interest to U.S.
state governments; Iowa,s governor visits Spain this week
with a delegation. The Embassy worked with the U.S. Chamber
of Commerce of Spain and the GOS to organize an energy
conference held in June that featured renewable energy and
brought Department of Energy senior official Paul Dickerson
as the keynote speaker and attracted senior executives of
leading edge U.S. firms in the renewable industry to
participate.

------------------------------------
Next Steps and Request for Reactions
------------------------------------

10. Post is seeking to increase linkages between U.S. and
Spanish government officials and business leaders in many
ways. We are exploring the possibility of Spanish
participation in the USG-cosponsored March 2008 International
Renewable Energy Conference. We hope to coordinate a Spanish
government and private sector renewable energy delegation to
the U.S., to be led by the American-Spanish Chamber of

Commerce. This visit could include participation in the
March conference. The delegation also could hold meetings at
the National Renewable Energy Laboratory in Golden, Colorado.
We intend to incorporate a renewables segment into the next
annual meeting of the U.S.-Spain Council, to take place in
the first half of 2008. We also hope to generate an
agreement on bilateral cooperation, including on research and
on encouraging investment between the two countries. We also
will seek to carry out an active public diplomacy program,
including programming U.S. speakers to discuss the U.S.
industry and federal and state regulatory issues.

11. Action Request: Embassy Madrid seeks reactions from
Washington agencies to post,s proposed initiative. Post
also welcomes any suggestions for additional ways to increase
linkages in this important area. Points of contact who can
provide additional information are Darren Perdue at
PerdueCD(at)state.gov and James Dudley at
DudleyJL(at)state.gov. Post looks forward to working with
addressees on this important matter. End Action Request.
LLORENS

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