1. INTRODUCTION

On June 20, 2014, Ministerial Order IET/1045/2014, of June 16, approving the remuneration parameters of the standard plants applicable to certain plants engaged in electricity production from renewable sources, cogeneration and waste (the “MO”), was published in the Official Gazette of the Spanish State. This order completes, for existing plants, the economic framework defined by Royal Decree-Law 9/2013, of July 12; Electricity Sector Act 24/2013; and the recently passed Royal Decree 413/2014.

The MO applies to plants that were receiving premium remuneration when Royal Decree- Law 9/2013, of July 12, came into force.

It also applies to plants using technology other than wind, solar thermoelectric and photovoltaic that remain subject to the Fourth Additional Provision of Royal Decree 413/2013.

The purpose of the MO is threefold:

  1. To define the categories of standard plants in which all the existing plants in Spain are included.
  2. To establish the equivalence between these categories and the groups and subgroups existing under the now repealed Royal Decree 661/2007 and Royal Decree 1578/2008.
  3. To establish the remuneration parameters and operational hours for each of the standard plants.

2. CATEGORIES

Annexes of the MO defines a total of 2071 standard categories (called “IT”) in which all the plants in Spain are included, separated by technology, capacity and year of start up.

3. EQUIVALENCE BETWEEN THESE CATEGORIES AND EXISTING GROUPS AND SUBGROUPS

The MO establishes rules to ensure equivalence, so that each plant is assigned to a standard plant. It even envisages, in its First Transitional Provision, a mechanism for assigning by default the IT to plants to which the general allocation rules do not apply.

4. PARAMETERS

The annexes to the MO contain the different remuneration parameters (remuneration for investment, remuneration for operation, fuel costs, estimated cost of the price of the pool) for each IT. Thus, each of the plants will be able to calculate what its specific remuneration will be in the period for which it is assigned, by reference to what the standard plant to which it has been assigned is entitled. Each plant will also be able to verify whether (i) it will receive (a) the two possible forms of specific remuneration (remuneration for investment, according to the installed power, and remuneration for operation, according to the energy produced), or (b) only one of them; or (ii) it will cease to receive specific remuneration of any kind, as occurs with those considered to be already made profitable.

The MO also includes the regulatory useful life of each type of plant, and the specific values of the operation thresholds and of minimum operating hours (annual and quarterly) for each IT.

5. OTHER RULES

The MO contains specific rules applicable to certain groups of plants:

  1. Method of calculating the remuneration for hybrid plants.
  2. Procedure for registering plants subject to the Fourth Additional Provision of Royal Decree 413/2014 in the Remuneration Regime Registry.
  3. Allocation procedure for cogeneration plants that have been substantially modified.
  4. Specific remuneration for operation for certain biomass plants.

6. ANNEXES

The MO contains 8 annexes that include the different IT and the parameters applicable to each of them.

7. FINAL CONSIDERATION

Although there are still questions regarding aspects relating to settlement systems, and the manner in which certain aspects of Royal Decree 413/2014 will be applied, the MO concludes, in general, the reform started by Royal Decree-Law 9/2013, of July 12, almost a year ago, and allows all producers to ascertain the remuneration that will apply to them in the first regulatory period (subject to the revisions envisaged for the first regulatory semi-period).