The Association of Renewable Energy Companies (APPA Renovables) rejects the measure of the reduction of remuneration approved by the Council of Ministers with its current wording, which could lead owners to make the decision to temporarily stop their activity or to denounce the contracts, something that could further increase the price of pool. In his opinion, it implies a retroactive effect on hundreds of renewable facilities that, starting tomorrow, will seriously affect their viability. The criticism has been joined by the Wind Business Association (PREPA), while the large photovoltaic employer Unef is evaluating the content in detail to adopt a consensual position.
According to the association, “the impact that the standard will have on numerous wind and photovoltaic projects with price hedges and power purchase contracts (PPA for the acronym of Power Purchase Agreement) will make the owners or the counterparties of the contract lose money with each MWh injected into the grid, ”says the association, adding that, in a typical case, the affected renewable facilities will have to sell at a loss (for reductions that may exceed the 100 euros / MWh).
“The stoppage of renewable projects, which would be carried out so as not to have to incur significant losses, would lead to a lower supply and, therefore, a foreseeable additional rise in the pool electricity as a direct consequence ”, has advanced the association, which understands that this effect“ was not the one sought by the Government ”, which has made a significant effort in recent years to accelerate the transition to a lower carbon economy, with greater presence of renewables and with lower energy costs thanks to the competitiveness achieved by clean energy.
APPA demands the processing of the rule as a bill in the Courts to be able to modify the most damaging aspects for the projects and safeguard legal security, essential for obtaining the more than 100,000 million euros in investments necessary to undertake the Energy Transition. In addition, it is concerned about the linkage of the reduction in income to the gas market and, in particular, to Mibgas, a market with little liquidity, very volatile and with prices currently on the rise, which makes the behavior of the electricity market even more unpredictable. .
For its part, the Wind Energy Business Association (AEE) has warned of the impact that these can have on the sector. PREPA considers that the measures only focus on a part of the electricity market and forget about “the implications in other environments.” For the 250 companies in the sector that make up PREPA, the Royal Decree-Law will have a negative impact on 21% of the Spanish wind farm, specifically, in those parks with more than 20 years or in facilities incorporated under merchant or PPA schemes.
Furthermore, although the Government’s measures are of an extraordinary and temporary nature, they may entail “changes in the behavior of economic actors” and discourage investment in the wind and renewable sector. The wind sector considers that they constitute the “most efficient energy to reduce the price of electricity” and, nevertheless, the one that “will be affected with the greatest impact with these new measures”. PREPA has also asked to facilitate the installation of a new wind power and to bet on the expansion of renewable energies, which are “the only solution” against the “ups and downs in international markets of the prices of energy products of origin fossil, raw materials or CO₂ ”.