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  • © ICIS HEREN - Spot decision
    2013-05-14

    Royal Decree-Law 2/2013 is an emergency decree that hit the statute on 1 February as part of government measures to cut the ballooning tariff deficit - a debt that accrued because regulated spending was greater than regulated income (see EDEM 4 February 2013).
    Prior to the new law, operators of renewables projects in Spain could choose from two payment methods.
    They could be paid either on a daily spot market pool price plus subsidy basis, or receive a fixed rate through the regulated tariff system.
    The new law abolished the first payment system, meaning renewables operators could only take a regulated tariff or accept the daily spot pool price open to all generation types without subsidy.
    However generators chose not to opt for this, because it removed renewables technologies from the special regime, which included standard renewables, small-scale hydroelectric and cogeneration plants, while also sweeping away the right to priority dispatch, whereby renewables advanced to the top of the merit order.
    Around 90% of wind generators had been on the market price plus premium subsidy before it was cancelled, the AEE spokeswoman said.
    "The ironic thing is, if the government had not insisted on the abolition of the market price plus premium, it would have saved money because pool prices have been so low recently," the spokeswoman added.
    Spanish pool prices frequently fell into single figures during April because of the high availability of wind and hydroelectric power, data from spot market operator OMIE shows.
    The AEE spokeswoman said the appeal process was likely to be a long one and could not give any indication of when it would likely be admitted.
    Retroactive subsidy cuts have previously been alluded to by German environment minister Peter Altmaier, only for the legality of such a move to be questioned (see EDEM 4 February 2013).
    A similar move in Italy in 2011 was also attacked (see EDEM 19 April 2011).

    (THE ICIS HEREN REPORTS - EDEM 17092/ 14 May 2013)

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