After the unsuccessful attempt to cut the revenues of the large electricity companies, the Government has focused on remove from the wholesale market the generation of renewable Older and cogeneration and waste plants (facilities of the specific remuneration scheme known as RECORE) to serve directly to industry and to domestic consumers with regulated tariffs (PVPC) at a lower price to the current market (more than 200 euros per megawatt-hour).
Around 60% of the 50,000 megawatts of renewable power and cogeneration installed in Spain correspond to this type of facility. These are plants, prior to 2014, which were guaranteed a reasonable profitability to cover your investment to be able to compete on equal terms in the market. These facilities have a profitability of between 7.09% and 7.39% that is adjusted every three years with the income received (the next will be at the end of next year).
According to the CNMC, of the 114,034 gigawatt-hours of renewables and cogeneration sold last year, 82,375 were installations with premiums. And of these, most were renewable (53,379) and the rest (28,996) cogeneration or waste plants. For this reason, the Ministry for the Ecological Transition has met in recent weeks with renewable associations such as AEE, Appa, Unef or Anpier and with the cogeneration (Acogen and Cogen) to know their proposals.
The main problem exposed by the sector is that many of these facilities are “not available” because they have previous coverage on prices so as not to depend on the market. “Setting a fixed price for these facilities instead of the market price implies a change in conditions and we must see how it is done and what implications it has,” explains the general director of APPA Renovables, José María González Moya.
The first slogan, therefore, is that the mechanism finally developed by the Executive be volunteer and, if it is not, that it at least has a degree of exemptions that allows all those facilities that have compromised energy not to be forced to break their contracts. “It is what would make such a measure successful”, points out the general director of the Wind Business Association (AEE), Juan Virgilio.
Another key will be to know what are the conditions of sale of that Energy “so as not to harm the sector”. That is, the price, the characteristics of the sale and the timing. “If it is a question of lending a hand, we will make the energy available for the Government to decide what to do with it,” acknowledges the general director of UNEF, José Donoso.
But not everything is tune. The small traders, integrated into ACIE, have warned the Executive that these measures may involve a “massive transfer of customers” to the “new” rate “artificially reduced” with which “free traders could not compete.”
In addition, they warn that the current financing scheme (representation of independent generations) could be “broken”, which would make them lose a source of financing of 1,000 million and they would have to deposit with their own funds an “enormous amount” of guarantees before OMIE. However, the Government also works through the ICO to offer guarantees of greater liquidity or guarantees and through the OMIE and the CNMC to provide additional guarantees to reduce terms and obligations with respect to their guarantees.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.