Spanish supreme court paves way for lawsuits against solar FIT cuts

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Pedro Palencia, UNEF’s energy policy director, confirmed the news, saying: "Overall, there have been more than 300 lawsuits to the Supreme Court. However, the court is considering to only allow a handful going forward, setting the case for the rest too.

"UNEF’s lawsuit is very important and may decide for the whole sector," Palencia told pv magazine.

Spain has entirely abolished feed-in tariffs since 2013 via the Real Decreto-Ley 9/2013 law. A new law, the RD413/2014, approved in June, implemented the FIT cuts and provided guidelines on the calculation of solar PV project income. This is now calculated separately per project and is based on a series of parameters that take into account a plant’s ‘efficient operation.’ The parameters were established via a separate ministerial mandate in July.

UNEF is not allowed to go against a law, said Palencia. "This is only available for the defensor del pueblo [ombudsman] or regional governments and the court to judge cases is the Constitutional Court," he added. Therefore, UNEF will appeal to the Supreme Court against the royal decree, and the ministerial order accompanying the law and setting subsidy payment parameters. The legal firm representing UNEF at the court will be international firm Watson, Farley & Williams.

Renewable power payments following the RD413/2014 law have been reduced significantly. Specifically, for plants of a certain age, subsidy payments have almost disappeared. For newer plants, the new system pays a ‘recognized cost’ – an amount to recover fix and variable costs associated with capital costs. Payments also take into account the ‘regulatory life cycle of a renewable power plant.’ The six-year regulatory periods are divided in two sub-regulatory periods of three years each. Within each sub-period, revisions will be made but, given the government has said it would only allow a ‘normal return of investment’, subsidy payments will decrease over time.

Furthermore, the RD413/2014 law obliges renewable power plants to compete with all other forms of energy on the wholesale market on equal terms. Renewable units are no longer used as secondary or tertiary reserves. Plant operators therefore compete in the electricity market, trying to sell as much electricity as possible.

In the forthcoming November issue of pv magazine, Madrid-based law firm Rödl & Partner will present Spain’s latest measures in line with a legal approach to protect international investors’ Spanish PV investments by binding guarantees of the Energy Charter Treaty, a worldwide Energy Constitution.

pv magazine will also examine the state of retroactive measures and realistic expectations of FITs in Europe. The issue will offer an update on the latest market developments in Spain, Greece, Italy and the Czech Republic in the aftermath of retroactive measures.