Spain post-2012 legislation 'worse than feared'

SPAIN: Spain's regulators have received the government's draft pay mechanism affecting new wind capacity connected after end-2012, when the present regulation expires.

The national wind association Asociación Empresarial Eólica (AEE) said the document "presents an even worse scenario than expected". It added: "If passed, it will mark a de facto wind market moratorium."

Among unexpected items is a 35% cut to the production incentive, currently at €30.10/MWh, paid in addition to the going wholesale electricity market price. The AEE said the €20/MWh proposed is "non-viable".

The draft sets an overall minimum price of €55/MWh, in case wholesale electricity prices fall below €35/MWh; way below the current safety net of €77/MWh.

Even worse for AEE is that incentive rates, reviewed annually, can slide downward for all new capacity after end-2012 if wind developers exceed a 1.4GW annual quota on new build. The rate will rise if the quota is not met.

The draft cuts eligibility to the production incentive for new capacity, from 20 to 12 years. Annually, that incentive will now be limited to the first 1,500 hours of generation only.

As the government tries to usher in the new regulation before the 20 November general election, the AEE said it will "race against time amend" the document.

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