Iberdrola warns the winds of change need to reach gale force

Electricity generators need to lead the move away from fossil fuel dependence, leaving oil and gas to plastic manufacturers and other industrial users, according to the head of the world's biggest wind energy group.

Ignacio Sánchez Galán, executive chairman of Iberdrola of Spain, says technological advances in renewable sources such as wind and solar generation meant the power industry was better equipped to wean itself off oil and gas. In contrast, most industrial sectors that relied on hydrocarbons were not, he told the Financial Times.

"You have to ask yourself: 'Can we live in the future without things like fertilisers, plastics and certain types of polymers?'," he said.

"We do not currently have alternatives for these products," he said. "However, we do have alternatives for energy production."

His comments pre-empted those of Nobuo Tanaka, executive director of the International Energy Agency, who on Friday said a "technology revolution" was needed to halve greenhouse emissions by 2050.

He also said carbon offset schemes would need to charge $200 a tonne - compared with $43 in the European Union - to deliver the emission cuts needed to avert the threats of global warming. An IEA report commissioned by global leaders, found that the world needed to build 32 nuclear plants and 17,500 wind turbines every year.

While subscribing to the drive to cut harmful emissions, Mr Galán said he was also concerned about oil reserves.

"Do we want to be responsible for burning out in our generation, or this century, resources created over millions of years," he asked.

"Wind is a consolidating technology; the efficiency of solar-thermal generation is going to keep improving. We must do everything possible to reduce dependence on oil, regardless of the cost."

"He is right," said Joachim Belz, chief executive of Weid-muller, a German manufacturer of components for the electric and telecommunications industry which is a big consumer of plastics. "We don't see at the moment any chance of replacing plastics with something not based on oil."

Iberdrola, with more than 8,000MW of installed capacity, is the world's largest producer of wind energy. Wind turbines and other renewable sources account for nearly 20 per cent of its global generation portfolio. This, coupled with a series of takeovers - including last year's €17bn ($26.3bn) purchase of Scottish Power - have made it attractive to large groups looking for critical mass across Europe, or in renewable energy.

Mr Galán called for a "re-ordering" of the electricity sector in Europe, with more cross-border connections to facilitate the smoother movement of energy to areas of most need. He criticised "asymmetries" on the continent, under which some countries promoted open competition and price liberalisation while others, "with the support of a state budget, sought nothing more than control of markets".

"Companies such as EDF, but not only them, are more interested in controlling the sources of electricity production than creating a real market," said Mr Galán. The Iberdrola chief has been critical of the French company since learning in February of plans for a joint bid for Iberdrola with ACS, the Spanish construction group.

The French group's interest in Spain, however, has receded to make way for a possible bid for British Energy, the UK's main nuclear power group. Iberdrola, too, has expressed interest in the UK company, although only as a junior partner in a possible joint bid. The Spanish group is also close to finalising the acquisition last year of Energy East, a power group covering north-eastern states of the US.

In spite of speculation about a tie-up with Gas Natural, the Spanish gas and electricity supplier, Mr Galán said Iberdrola was now "large enough" to compete in Europe with the likes of EDF, Eon and RWE of Germany and Italy's Enel.