Spanish Congress rejects repeal of Article 4 of Royal Decree 6/2009 to relief of Spain’s renewables sector

Last week, the Spanish Senate approved a new law which includes a repeal of Article 4 of Royal Decree (RD) 6/2009 establishing the registry of preliminary assignment of remuneration for renewables projects. This change in legislation would have spelled danger for the renewables sector in Spain, especially the solar thermal power sector as it would have led to further regulatory uncertainty and a an annual cap of 500 MW that would cripple many solar thermal projects currently under development. Fortunately, the Spanish Congress voted yesterday to reject the repeal passed by the Spanish Senate.

After a week of upheaval and concern in the renewable energies sector in Spain, things returned to normal yesterday after the Spanish Congress voted not to ratify the repeal of Article 4 of RD 6/2009 establishing the registry of preliminary assignment of remuneration passed in the Senate last week. At the time of voting, 327 out of 328 members of parliament voted against the repeal and therefore all renewable energy projects (except solar photovoltaic projects which are covered by specific legislation) will still have to be filed on a registry of preliminary assignment of remuneration to receive current feed-in tariffs.

This landslide vote means that the regulatory framework governing renewables remains unchanged; however it does highlight the volatile nature of decision-making by political groups in Spain. In spring, two of Spain’s political parties – PSOE (Spain’s current Government) and CiU – voted in favour of the controversial RD 6/2009. Last week, only five months after it came into effect, CiU argued that the registry of preliminary assignment of remuneration established by RD 6/2009 needed to be scrapped because it interferes with regional government powers. The PSOE voted in favour of this repeal in the Senate, and now, just eight days later, both parties have changed tack and voted against the decision they took just over a week ago.

Pressure and uncertainty

But what has happened between Congress and the Senate? CiU, the force behind the repeal, has defended its position saying that its only intention was to give back powers to regional governments and has accused the PSOE of “contaminating” the repeal presented to the Senate by including a “lethal” transitional provision for renewables. CiU member Josep Sánchez Llibre was referring to an amendment that in practice, would mean that any installations filed in the Ministry of Industry register after 2010 objectives are met would not be entitled to the current feed-in tariff and would only be able to charge the market price for electricity until new feed-in tariffs are approved. At present, RD 6/2009 establishes a year’s moratorium once 85% of the objective set by the Ministry of Industry is reached.

The PSOE responded yesterday by defending the repeal approved in the Senate, claiming that it had tried to respond to the challenges in the energy sector due to the economic recession, while also tackling climate change and avoiding a “speculative bubble”. Nevertheless, the PSOE’s Economy spokeswoman, Montserrat Colldeforns, has said that the issue “should have been thought over a bit more. We don’t want things not to change; we want things to change for the better”.

These comments come after a week of uncertainty and pressure. Uncertainty among the industry associations which have once again seen how the rules can be changed leaving them in a position of regulatory upheaval that is impossible to manage. Pressure from socialist political heavyweights in Andalusia, Extremadura and Castile La Mancha, even through letters to the President of Spain, demanding that the situation be resolved and returned to how it was before the repeal was approved by the Senate.

Ministry of Industry sources consulted by Renewable Energy Magazine have said that the Ministry does not wish to comment on the parliamentary debate and provided assurance that work on the registry of preliminary assignment of remuneration continued as normal even after the repeal was approved by the Senate.

In fact, on the same day the repeal was rejected, the Ministry announced that 89 of the 708 renewables projects filed in the registry have been approved to date, representing a total capacity of 1,633 MW of wind power, 150 MW of solar thermal power, 84 MW of cogeneration, 55 MW of biomass; 34 MW of biogas y 42 MW mini-hydraulic.

“The Ministry doesn’t want renewables to grow”

This is the firm belief of the Chairman of the Spanish Association for Renewable Energy Producers (Asociación de Productores de Energías Renovables), José María González Vélez, expressed in a statement to Renewable Energy Magazine. González lays the blame on the Ministry of Industry and the Energy Secretary for what has happened. “The Ministry wants to call all the shots and despite the declarations made by the President of the Government, what the Ministry really wants is for renewables not to grow. A lot of gas and coal need to be burnt”.

Solar thermal power sector relieved

Despite González’s comments, Protermosolar (the Spanish solar thermal power association) breathed a certain sigh of relief after Congress voted to leave things as they were. According to Protermosolar estimates, the change proposed by the repeal in the Senate would have put €10 billion of private investment and 300,000 jobs in danger. In a statement to Renewable Energy Magazine, the Chairman of this trade association, Valeriano Ruiz, said that the rejection of the repeal is “a significant success after a lot of lobbying, although the blockage is still in the same place and those who can remove this blockage remain the same. We need to urge the Ministry of Industry to take action”. Valeriano Ruiz has shown his concern that a number of solar thermal power projects filed with the Ministry have still not been approved. “We cannot let our guard down. We have won a small victory, but companies waiting for their projects to be approved are in the same position or even worse off because another week has gone by”.

Time indeed flies and the renewable energy associations in Spain want to remain on top of any future moves by the Minister of Industry, Miguel Sebastián, and his team. “I am very worried that the Ministry may be tempted to push through by royal decree the changes Parliament has rejected. It would show a lack of loyalty [to the renewables sector],” said José María González Vélez.

The sector is clearly wounded by this recent regulatory turmoil and has lost faith in the Ministry of Industry which is supposed to by defending its corner. Time will tell how the situation in Spain will pan out but for now, all parties are in need of some breathing space after a hectic week of negotiations.

For additional information:

Spanish Ministry of Industry

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