EU approves Spain’s incentive scheme for renewables

The European Commission has approved Spain’s scheme supporting electricity generation from renewable energy sources, high efficiency cogeneration of heat and power and waste.

The EC said that the scheme complies with the EU state aid rules and that it ensures that the use of public funds is limited alongside no overcompensation.

The Commission also stressed that the scheme’s 40,000 beneficiaries, which include recent and new projects as well as existing renewable energy power facilities that were benefitting from previous incentive programs, receive support through a premium on top of the market price of electricity, so that they have to respond to market signals.

The EC, however, has not mentioned the fact that existing projects from previous incentive schemes, which were transferred to the new program, have suffered several retroactive incentive cuts in the years prior to 2014, something that the EU has always recommended not to be introduced by member states.

“I am pleased to see the latest Spanish renewables auctions have shown the positive effects of competition: companies are ready to invest in new installations with very low levels of State support. Spain’s transition to a low carbon, environmentally sustainable energy supply is important and this support scheme will help,” said the Commissioner Margrethe Vestager.

Under the scheme, the Spanish government held its first two auction for large-scale renewable energy projects this year. Overall, around 8 GW of installed power were assigned in the two auctions. In the first one, which was held in May and had unfavorable rules for PV that made wind prevail in the case of a tie between the bids, 99% of the allocated capacity was for wind power projects. In the second one, held in late July, solar had the largest share with around 3.9 GW of assigned projects.

In a recent interview with pv magazine, the president of Madrid-based solar association UNEF, José Donoso, has blamed the auction system set up by the Spanish government has unable to bring transparency in the renewable energy market.