AEE complaint that with the new regulation industry addresses the wind sector to paralysis

The Ministry of industry, tourism and Commerce (MITYC) has sent to the National Energy Commission (CNE) the draft Royal Decree by which the remuneration of wind activity shall be established without having previously reached an agreement with the sector, compared to what had been announced. According to the wind energy business association (ESA), this proposed regulatory is a far cry from the debated during the negotiations between the sector and the MITYC and is unacceptable both in terms of model and what it refers to economic conditions. The sector considers that, if it goes through, it will have serious consequences, such as the loss of thousands of jobs, the relocation of factories, the destruction of industrial fabric, the loss of confidence of domestic and foreign investors, and the discomfort of the autonomous communities, among other things. Therefore calls for the Government to reconsider its position.

The draft Royal Decree establishes a 1,400 MW wind annual installation path to meet the objectives of 35,000 MW under the renewable energy Plan (PER) 2011-20. However, the sector considers that, under the proposed economic conditions, these objectives not be achieved because by not ensuring reasonable profitability of projects, installation of parks will be unworkable. Thus, though the sector is months claiming the urgency of a new regulatory framework which dictates the rules of the game over on December 31, 2012, considers that the proposal sent to the CNE would have a similar effect for the sector: a de facto moratorium in the face of the coming years.

The most important points of the draft Royal Decree are as follows:

• Change of model. That has been discussing for months with the sector and he has expressed publicly, MITYC proposes to radically alter the existing model - regarded by the European Commission as the most efficient economically of the European Union-. It proposes a system of variable premiums over time why are they automatically use for all parks built under the umbrella of the new regulation if it exceeded the annual quota. Both the sector and banks consulted by the wind energy business association (ESA) consider that with this model should not possible access to financing, that it would introduce such volatility in the retribution that would calculate the profitability of a park during his lifetime.
• Unacceptable economic conditions. The parameters proposed by the Government do not guarantee reasonable profitability of the projects. The more substantive aspects are confined to twelve years as opposed to the current twenty the perception of the premium; facilities only charged the premium for the first 1,500 hours of operation; premiums do not will be reviewed according to inflation, as it is done currently. In addition, despite continuing the concept of land compensation, this will be reviewed annually by the Government, which would introduce even greater volatility. All of these conditions as a whole would amount to a discount of about 40% of the remuneration provided for in Royal Decree 661/2007 for post-2013 installations.
• It discourages the repowering. Despite the insistence of the sector, industry has decided to not promote the revaluation, which means the replacement of old wind turbines by others more modern parks that are in the best locations. On the other hand, also provides solutions to outstanding problems, as they are the parks listed in the register of Preallocation with problems to be built before the closing date for registration (as of December 31, 2012) for reasons not attributable to the promoters and often as a result of the changes approved by the Government itself on the network infrastructure.

ESA considers that, if this proposal goes through in conditions that has been sent to the CNE by urgent procedure, opens one of the worst possible scenarios for the wind sector, which employs more than 30,000 people, is 0.34% of GDP, exports technology for more than 2,000 million euros and saves imports of fossil fuels by 1.5 billion euros per year, among other things.