Financial Times, 26 April 2005 - Until 1987, Ignacio Moya, a retired farmer, had barely travelled beyond the municipal limits of La Muela, the Spanish village where he was born in 1927.

These days, he struggles to remember how many times he has been to the Canary Islands, and what ports he and his wife Alicia Mateo visited on a cruise around the Caribbean in 2002.

However, he recalls that a 2003 trip to Mexico was "divine".

Ignacio and Alicia are not the only residents of La Muela living the high life in their golden years.

Enriched by the revenues of one of Spain's largest concentrations of wind-driven electricity farms, the village and its citizens have passed from obscurity to national celebrity since the first 12, 25MW generators were erected on its outskirts in 1986.

These days the village is host to nearly 50 towers, each supporting three 20-metre rotor blades and producing 750MW of electricity an hour.

Fanning out across the barren wind-swept plains of central Aragon, in Spain's north-east, they resemble enormous white three-armed robots.

Ignacio and Alicia's annual trips have been heavily subsidised by the local council, which is paid about Euros 1m (Dollars 1.3m) a year in royalties and land rents by the electricity companies that run the wind generators.

Private landholders, too, earn about Euros 2,000 a year per generator, putting Muela's total windfall at about Euros 1.5m a year.

Drawn by the booming local economy, including the creation of a huge business park near the village, returning families and newcomers have swollen La Muela's population four-fold in the past few years.

With some 8,000MW of installed capacity, Spain lags behind only Germany and the US in the world in terms of total wind-generated electricity. On a per capita basis, it is second to Germany.

Wind farms account for about 8 per cent of generation capacity in the country, and this is expected to rise to about 15 per cent in 2010.

Industry critics say the wind farms are a bad investment.

The total cost of producing 1MW of electricity is about twice that of a coal-fired plant. Operators can never predict with certainty when wind will produce the next surge, meaning the turbines are unreliable suppliers to electricity grids.

Environmentalists say they are ugly and interfere with bird flight patterns.

However, heavy opposition to wind farms of the type seen in the UK is non-existent in Spain, mainly because of the availability of land and proliferation of poor rural areas that can no longer live off traditional agriculture.

At the same time, electricity distributors in Spain are forced to pay generous premiums on wind-generated energy, as part the country's commitment to capping carbon dioxide emissions at 15 per cent above 1990 levels by 2012.

All this has helped fuel a modern-day gold rush in the country, complete with land speculators and small development groups that build and then sell wind farms to generation companies. Gas Natural was the latest Spanish generator to push into renewable energy, paying a regional savings bank and other financial investors Euros 272m for 470MW of installed power and a 1,400MW project pipeline.

The Boston Consulting Group estimates that in Spain more than 300 companies participate in a business that has directly and indirectly generated 17,000 jobs in the past few years.

Gamesa, the Spanish aeronautical company, is the second-biggest manufacturer of wind-driven turbines in the world.

Carmela Moratalla was thinking of selling her small cereal farm on the outskirts of Sisante, in Castilla La Mancha, when a company since absorbed by Iberdrola, the electricity group, offered her Euros 9,000 a year for 30 years for permission to build three 24-storey wind-driven generators on her property.

"It's a nice little business," she says. "If only they'd built six."

Despite early reservations, Casilda Agarra, Sisante's mayor, is happy to see the flashing white blades of 60 giant generators on the outskirts of the village.

Iberdrola pays the local council a Euros 3,000 royalty per generator, giving her administration an extra Euros 180,000 a year to play with.

Although only a "small percentage" of the annual budget, the money has helped fund a series of projects, including restoration of the historic quarter, that may have otherwise been delayed.

In Higueruela, about 100km south-east of Sisante, wind farm revenues have been ploughed into a home for elderly people big enough for almost all of the town's residents to retire at the same time.

Ms Algarra is not given to such extravagance. A local entrepreneur as well as mayor, she likens Sisante to a small company with potential for growth.

"People see the wind farms and they see a village where a large company has bothered to invest a lot money," she says.

"This inspires others to see Sisante as an investment opportunity."

Copyright 2005 The Financial Times Limited
Financial Times (London, England)