Stays mainly in the plain… Er, by George, I think I've got it wrong. Perhaps it's wind power?

Ah, yes! Spain, with its 11,615 MW of wind power capacity by the end of 2006, is on its way to 20,155 MW by 2010. But current estimates by the APPA predict Spain will fall short of its goal.

In 2006, Spain added 1,587 MW of capacity, up from 1,500 in 2005. With these figures extrapolated out, Spain should reach only 18,000 MW by 2010, well short of its government-mandated 20,155 MW.

“Big deal,” you say? Well, actually it is. Wind power generates about 9% of Spain's electricity production. And at times that number has peaked to 25%.

Compare that to the United States where wind power generates less than 1% of our electrical needs.

That's not really a fair comparison, though, when you think about the fact that the U.S.'s current wind power capacity is right around 10,000 MW. With Spain's capacity at 11,615 MW, it's easy to see just how much less power Spain consumes in relation to U.S. consumption.

But let's move on…

Spain's wind power capacity makes it the second-largest wind energy producer in the world. In fact, Spain is home to some amazing wind companies. Gamesa Eólica (a division of Gamesa Corporación Tecnológica S.A. (GAM:MCE) (GCTAF.PK)) is the second-largest wind turbine producer; Iberdrola (IBE:MCE) (IBDRF.PK) is the world's largest wind farm operator; and Acciona Energía (a division of Acciona (ANA:MCE) (ACXIF.PK)) is the world's largest wind-farm builder and developer.

Spain's been experiencing an annual growth rate of 30%, and strong government support. Spain's goal of 20, 155 MW by 2010 would mean wind power would be generating 30% of the country's electrical needs.

So what's holding Spain back? It seems like everything's been working so well for the industry.

In fact, the wind industry helped lower the unemployment rate from 20% to 8.5% over the past decade, and supports about 30,000 jobs with 300-400 companies. And the economic benefits it brings to rural villages, as MIT's Technology Review states, “has literally saved some communities.”

The industry has experienced some problems tying into the grid. Via Platts.com:

“The [APPA] said the slower than hoped for growth is largely the result of construction delays caused by difficulties in getting grid connections for planned installations.”

This problem isn't just in Spain's wind industry. Many wind markets around the world have had trouble connecting to power grids. One of the main reasons for this is power quality. Without getting too technical (because, to be honest, I don't quite understand it all myself), here's a brief explanation of why it's difficult to hook large wind turbines into traditional power grids.

Basically, to start a wind generator, you need to magnetize it. That requires power, and can cause homes and other electricity users to momentarily lose power. Then, once the generator is magnetized and begins to work, the network can experience a power spike.

For weak or small power grids, this can be a problem, and as Spain populates the rural countryside (i.e. its “plains”), there is a high likelihood that weak or small power grids are slowing wind-power capacity growth.

It's also pretty expensive to upgrade or reinforce these weak grids.

Also, the further away from electrical demand you get, the more of a challenge transporting “rural” power can be. Transmission lines need to be upgraded and reinforced.

Gamesa Eólica has been working on a turbine that can adjust its speed, and therefore the amount of power that flows into the transmission line. That can help eliminate some power spikes that strain transmission lines. Additionally Gamesa Eólica's turbines can rotate in fractional increments to take advantage of wind shift. By being this efficient, turbines can be more reliable and their power grid contributions steadier.

Spain is currently working with France and other European countries to upgrade transmission lines and handle other power grid challenges its wind industry is facing.

Though the country might miss its goal of 20,115 MW of wind-generating capacity, 18,000 MW is nothing to sneeze at. From its current 11,615 MW, that's an annual increase of 1,596 MW, or 13.74%.

We played Gamesa Corporación Tecnológica S.A. (GAM:MCE) (GCTAF.PK) in Material Profits, and took 33.75% in eight months, and that's not too shabby.