November 26 (Renewables Now) - Wind and solar associations in Spain have welcomed last week’s decision by the acting government to extend the premium rates for renewable energy, cogeneration and waste management facilities opened before 2013 for another 12 years.
The new royal decree-law (RDL), approved on Friday, sets the reasonable rate of return at 7.398%. However, this will only apply to facilities whose owners waive certain court-awarded compensations or quit their arbitration or judicial proceedings against Spain over retroactive premium cuts enacted by the Spanish government in 2013.
The calculated rate of return for other facilities in 2020-2025 is 7.09%, down from the current average of 7.398%, the acting minister for ecological transition, Teresa Ribera, announced Friday.
This rate is set for the purpose of avoiding legal uncertainty in case the government fails to pass the new rules with the status of a law before January 1, 2020. The RDLs in Spain are urgent measures that go into effect without a parliamentary debate, which can take place later to enshrine the changes in law.
The rate of return in the non-peninsular territories has also updated and set at 5.58% in 2020-2025, down from 6.503% applied in the previous five-year period.
The ministry for ecological transition said the new rates will bring savings for the consumer. They are financed through electricity bills.
Ribera said the new RDL is aimed at restoring investor confidence in renewable energy in Spain, which was shaken by the 2013 reform. Since then, several affected investors filed for arbitration before the International Centre for Settlement of Investment Disputes (ICSID) against the country, claiming multi-million euro damages.
Spanish wind energy association AEE welcomed the government’s regulation saying it will allow the country to meet the targets established in the National Energy and Climate Plan (NECP), while also guaranteeing a stable regulatory and economic framework for the development of renewables.
Echoing the positive reaction of AEE, its photovoltaic counterpart UNEF said that eliminating uncertainty is the key step to attracting investments for the development of more than 30 GW of solar projects by 2030 to meet the NECP targets.
Once the RDL is published in the official state gazette, AEE will analyse it in detail to evaluate its impact on the wind power sector.