Spain plans to set the return earned by renewable energy at 7.4 per cent,
moving to curb subsidies to an industry that got 50 billion euros ($77
billion) in the past decade, according to draft rules seen by Bloomberg News.
The rate on investment for clean-power plants was based on the average
interest of a 10-year sovereign bond plus 3 per centage points, according
to the regulations that still need final government approval. The more than
1,000 pages of rules cover electricity from renewables such as sunshine and
wind, as well as industrial co-generation and waste.
Successive Spanish governments have struggled to give financial incentives
to clean energy without passing on all of the costs to consumers. That
built up a debt temporarily borne by utilities, though under government
guarantee, potentially eroding the credit strength of both.
Prime Minister Mariano Rajoy’s Administration has killed subsidies for new
plants and scaled back those for existing facilities, and this latest move
will put them on a traditional rate pegged to their cost of investment.
The new rules set up hundreds of parameters for calculating cost bases.
They include type of technology and connection to the transmission network
as well as the year the facility entered service.
The regulatory changes are part of a series made in recent years “to
achieve the economic and financial stability of the electricity system and
avoid the inclusion of new costs,” the government said in the draft. Calls
to the industry ministry seeking comment today weren’t returned.
Wind-energy response
The Asociacion Empresarial Eolica, a wind-energy trade group, criticised
the draft, calling it a “sacking” of the industry and saying wind energy
was hurt more than others. About 37 per cent of installed wind turbines
will lose premium payments, while the rest will see their earnings reduced
50 per cent, the group said today in an e-mailed statement.
Solar energy in Spain became a lightning rod for both developers and
critics, as photovoltaic rooftop and stand-alone installations gained a
higher relative per centage of subsidies, or about 30 per cent of the 8.6
billion euros paid in 2012.
Solar supplied 8,160 gigawatt-hours to consumers in 2012, or about 8 per
cent of total energy generated by the major clean- energy groups.
By 2013, photovoltaic plants had grown to about 60,600. More than 99 per
cent entered into service within the last 10 years, according to the draft
regulations. That has left Spain with an installed base of 4,600 megawatts
of solar, or about 12 per cent of the total installed base for renewables,
co- generation and waste.
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