The goal for inauguration was initially set for January 2009. The timing was calculated backward from the completion date of the transmission facility of the local power company to which electricity will be sold. Another factor was the expectation that registration for the feed-in tariff program will be around March of 2009.
However, the announcement made on the details of the program in May 2007 stipulated "registration made by September 28, 2008." The schedule was advanced six months from the anticipated timing. Unless registered by this date, there would be no guarantee of operating revenue. This meant that in a mere 16 months, the Company must (1) procure solar power modules, (2) secure financing for project funds, (3) acquire various approvals and licenses from the Tenerife government and complete the construction of the power plant.
It requires nearly 56,000 modules to produce nine megawatts of electricity.
At the time, though, modules were scarce on the market, and without permits or funds, orders could not be placed with manufacturers. What worked greatly to our advantage was Sumitomo Corporation's power generation module export business, which had developed into a huge operation. Yoichi Sakai, the leader of the business, looks back. "It was impossible to arrange procurement for the Tenerife project alone, so we managed to secure enough modules by adjusting the shipments to Germany, where we had a longtime foothold."
Autumn 2007: blood instantly drained from the face of Naoyuki Hagiwara, who leads the project alongside Fukuhara. The financing bank suddenly "withdrew its offer," due to the impact of the subprime mortgage loan issue. Finding a new financing institution was a killer process. None of the banks had financing experience in this field, and they were extremely cautious. The team carefully explained the high stability and credibility of the project, as well as favorable factors such as abundant sunshine, the long-term preferential program, and the good collaborative relationship with the local community. After negotiations, a new bank finally agreed to sign a financing contract in March 2008. "At last we can start construction," thought Hagiwara -- "It took a huge load off of my shoulders."
Local partners offered a powerful endorsement in obtaining government approvals. Whether or not it was because of the Latin national character, permit issues were hardly on schedule. Masamichi Takase, the project manager stationed on Tenerife to oversee execution management, says the team "nearly gave up on starting construction many times." Every time, however, "Local partners offered everything they could to help support us, and that set the environment for us to proceed."
EU targets supplying 20 percent of its overall energy consumption with renewable energy by 2020. To achieve this goal, governments of EU member nations are working to implement various subsidy programs and preferential tax treatments to promote the introduction and use of renewable energy. One of such government initiatives is the "feed-in tariff," a program to purchase renewable energy on a long-term basis at fixed premium prices. Spain is now actively promoting construction of solar power generation plants, and it ranks second in Europe in terms of solar power generation capacity, next to Germany.
