Spain sets fixed minimum payments for renewables

Spain sets fixed prices in new lawThe bull market for wind power in Spain -- now with more than 700 MW of capacity -- has charged into a larger arena with the passage of a new law on December 23 for substantial production incentive payments for a range of renewables. The law came into effect on January 1.

For wind installations under 50 MW the subsidy amounts to ESP 5.26/kWh (Euro0.032/kWh). Added to the average electricity purchase price of ESP 11.40/kWh (Euro0.069/kWh) this brings payment for wind output to around ESP 16.6/kWh (Euro0.10/kWh) for smaller projects. For larger wind projects -- and most other forms of renewable energy systems larger than 50 MW -- the subsidy is ESP 1.0/kWh.

The subsidies became law in a Real Decreto, or Royal Decree, which also guarantees access to the grid for all renewables. There is no time limit attached to it or to the subsidies. The government says it is regarding them as an alternative to a carbon tax on conventional, polluting power plant.

Solar power generators receive the highest subsidy from the legislation: ESP 60/kWh (Euro0.36/kWh). At the other end of the scale, the incentive for cogeneration and power from waste is ESP 3.20-3.70/kWh. Hydro power will receive subsidies inversely proportional to its overall production on a downward scale up to 50 MW.

According to Antoni Mart’nez of Ecotècnia, a leading Spanish wind turbine manufacturer, the new law can only improve the already promising outlook of wind power and other renewables in Spain. "It has clarified the framework and dispelled the apprehension in the renewables sector that existed until just a few months ago," he says.