Spain: PV sector did not increase 2012 tariff deficit

26. April 2013 | Global PV markets, Industry & Suppliers, Investor news, Markets & Trends | By:  Shahriyar Nasirov

The PV sector did not cause Spain's power tariff deficit to increase to its record level in 2012, according to the country’s National Energy Commission (CNE).

Spain solar photovoltaic plant

Subsidies for the PV sector deviated from the original plan (€2.610 billion) by just 0.03% (€2.611 billion).

In its annual report, issued on April 18, CNE stated that Spain’s PV industry did not contribute to the massive power tariff deficit seen in Spain’s electricity sector in 2012. Overall, Spain’s cumulative tariff deficit has risen to €35.6 billion.

According to CNE’s figures, last year, the deficit reached €5.6 billion, thus representing a 45.7% increase on 2011. The increase was primarily attributed to the costs of the special regime (renewables and cogeneration) which, at €8.6 billion, ran 19% over budget (excluding PV); and for offshore power subsidies (Balearic Islands, Ceuta and Melilla) which, at €1.6 billion, ran 27% over budget.

Specifically, while subsidies for the PV sector deviated from the original plan (€2.610 billion) by just 0.03% (€2.611 billion), other renewables played a key role in the tariff deficit, including solar thermal which went 68% over its budget of €553 million, cogeneration which went 51% over its budget of €1.23 billion, and wind which went 5% over its budget of €1.9 billion.

See the table below for a further breakdown:

Technology

Installed capacity (MW)

Energy production (GWh)

Premium (€ cents/kWh)

Total premium (€ millions)

Total cost (€ millions)

Deviation

Cogeneration

6,440

25,448

4,83

1,232

1,865

51%

Solar PV

4,296

6,703

38,94

2,610

2,611

0.03%

Solar thermal

1,551

2,326

23,76

553

927

68%

Wind

22,664

47,160

4,11

1,937

2,037

5%

Others

4,124

21,638

-

891

257

29%

Total

39,126

99,191

7,28

7,221

8,586

19%

Source: Adapted from CNE

In order to handle the deficit, the Spanish government approved Royal Decree Law 1/2012 on January 27. This saw the suspension of financial incentives for new electricity generation systems using co-generation, renewable energy sources and waste; and a fee for the pre-allocation register for projects.

The most recent modification in the legal regime was made by RDL 2/2013 on February  1. The changes – including a premium for special regime installations that sell energy to the market – were introduced to reduce costs in the electricity sector and save, according to government estimates, between €600-800 million per year.

Special regime results in 2012

In 2012, the total amount of subsidies paid out to the renewable energy industry increased by about 20% from previous year to €7.2 billion, while their actual cost reached €8.9 billion. This growth can be attributed to the fact that electricity output from special regime grew by 10.6%, and the share of PV and solar thermal  increased by 11% and 88%, respectively.

In general, in 2012, energy generated by the special regime accounted for 38% of the total production of Spain’s electricity. At 6.7%, solar power ranks third under the regime, according to data by market operator, Red Eléctrica de España, behind cogeneration at 26% and wind at 47%.

Spain is expected to announce an energy reform in the next few weeks. Local media has reported that the renewable energy industry could be affected.

Edited by Becky Beetz.


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