What has happened in Spain with CSP FiT?
The Energy Ministry has recently released a draft proposal for the parameters to estimate the 'reasonable return' or 'profitability' to be applied to all renewable energy generators, eliminating the previous Feed-in-Tariff scheme.
The Government has established a profitability of 7.39% for current projects, based on the 10-year state bonds performance plus 300 points and has created 18 'standards' under which every Concentrated Solar Power plant will be fit. These standards are based on the technology and the year it begun commercial operation.
Each standard is based on the investment cost, the operation cost for a 'efficiently operated plant', the estimated incomes from the electricity sold to the national grid and a 25 years lifetime.
According to statements from Luis Crespo, General Secretary of Spain's CSP trade body Protermosolar, to CSP Today “If you had told any of the Spanish companies that invested in CSP four or five years ago that they would be getting 7.5%, they wouldn’t have put their money in the plants".
The new scheme is comprised by two elements, a remuneration linked to the investment (Rinv) based on the plant power and another linked to operation costs (Ro) based on the energy generated, let's have a look to the figures the Ministry has revealed:
The 'Código de Identificación' is the code assigned to each standard, it goes from IT-00998 to IT-01015. All the currently operating plants have been fit in one of the code. The 01015 refers to a yet to be built plant awarded to a consortium comprising SolarReserve and Preneal, although this plant is very unlikely to be finally developed.
The scheme assign a 25 years lifetime. The plant will receive the Rinv and Ro earnings up to 25 years unless the plant achieves the 'reasonable return' before the period ends. All the previous earnings since the plant began commercial operations are taken into account as part of this new system, in fact, some wind farms are will not receive any further subsidies as they have reached the reasonable return.
With these figures, a plant will receive the earnings from the electricity sales, the Rinv (multiplied by output power) and the Ro (multiplied by MWh generated).
Although this is not new, there is a cap for total hours a plant can run during the whole year, referred to as 'Horas de funcionamiento máximo'.
This way, the only 6 years old FiT system that helped deploy a 2.5 GW CSP sector and created a large number of jobs in a country with a roughly 30% of unemployment rate, is over.
Even before this draft proposal was published, there are five complaints filed with different International Arbitration Courts, after this draft is enacted as Law, something expected to happen soon as the ruling party has a vast majority in the Parliament, it is expected that some other international investors sue Spain.