Madrid and Balearics at loggerheads again

There may only be a flickering light at the end of the tunnel for the future of Balearic power supplies. On Friday central government in Madrid approved a series of measures to liberalise the Spanish market place and speed up deregulation of gas, electricity and telephones. With this new policy some of the future investments in gas and electricity being planned by Balearic Gas and Electricity Company (GESA) have been put at risk. Because of the government's wish to limit further market expansion by the two largest electrical utilities, Endesa, GESA's parent company, and Iberdrola, some of the projects GESA is hoping to develop over the next five years have been stopped. While this week has seen calls for a new power station to be built in the Balearics to help meet growing demand, the government has slapped a ban on any new power stations being built. Two of GESA's projects have managed to slip through, the first is the installation of the four gas turbines at Son Reus, two of which are due to come into operation next month and the second is the installation of a gas turbine in Ibiza. But plans for two diesel motors in Ibiza, two more gas turbines at Son Reus and two more to be installed in Minorca have been thrown into doubt thus increasing complications for GESA in its bid to secure a guaranteed power supply for the region in the future as the population and demand continues to grow. Balearic deputy Chief Minister, Pere Sampol, said yesterday that he intends to make immediate contact with the government in order to ask that the Balearics be exempt from the current changes. The Balearic government made it clear this week that GESA needs more funding from Madrid and that the local authorities are still putting the final touches to the new Balearic Energy Plan, which has then to be approved, but this latest move by Prime Minister Aznar and his cabinet has thrown local negotiations off track.

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