Country:Spain
Year:2004
Policy status:Superseded
Jurisdiction:National
Date Effective:2004
Policy Type:Economic Instruments>Fiscal/financial incentives, Regulatory Instruments
Agency:Ministry of Economy
URL:http://noticias.juridicas.com/base_datos/Admin/rd436-2004.html
Renewable Energy Description:

The Royal Decree 436/2004, passed in March of 2004, amends the previous Royal Decree (2818/1998) and is set up to fit into the existing general framework supporting RES-E as set out by the Electricity Act 54/1997, which is still in force. The Royal Decree 436/2004 provides incentives for new installed capacity of renewable energy sources in one of two ways:

1. Generators, who sell their production to a distributor, receive a fixed tariff that is defined as a percentage of a regulated tariff. The percentage is established on a technology by technology basis. The reference tariff for 2004, defined by Article 2 of Royal Decree 1432/2002, is indirectly based on the production market price, and has a value of EUR 0.072072/kWh.

2. Generators, who sell their electricity on the free market, receive the negotiated market price of electricity, an incentive for participating, and a premium, if eligible.

  • PV: PV < 100 kW receive a fixed tariff of 575% of the regulated tariff (i.e. EUR 0.40/kWh).
  • PV > 100 kW receive a tariff of 300% of the regulated tariff (i.e. EUR 0.21/kWh).

These tariffs remain in effect for the first 25 years, after which the fixed tariff for PV is reduced to 460% (PV < 100 kW) and 240% (PV > 100 kW) of the reference price.

  • Solar Thermal: The decree increases the incentives for the first 200MW of solar thermal electricity production in Spain. Under the first option, solar thermal electricity generators receive a fixed tariff of 300% of the reference price (EUR 0.21/kWh) during the first 25 years after start-up and 240% of the reference price (EUR 0.17/kWh) thereafter. Under the second option, solar thermal electricity generators selling their electricity on the free market may receive as a premium, 250% of the reference price during the first 25 years after their start-up and 200% afterwards plus an incentive of 10%.
  • Wind: The tariff for wind remains unchanged from 1999, where wind electricity producers could receive either a fixed tariff of EUR 0.06/kWh (90% of the reference price) or the average hourly market price of electricity plus a bonus of EUR 0.03/kWh.
  • Other Technologies: The tariff for other renewables, such as hydropower, bioenergy and geothermal receive fixed tariffs ranging between 80% and 90% of the reference price or the average hourly market price of electricity plus a bonus.
Climate Change Description:

Royal Decree 436/2004 was approved on 12 March 2004, and published in the Official Journal of the State on 27 March 2004, and establishes the methodology for updating and systematising the legal and financial regime of electrical energy production. The new system for renewable energy sources and combined heat and power (CHP) aims that by 2010, 30% of electricity production will be fuelled by renewable energy sources. This Royal Decree unifies the regulations for enacting Law 54/1997 on the Electrical Sector, providing the special regime with a new regulatory framework.

This new Royal Decree defines a system based on the free will of the owner of the installation, who can opt to sell the production or surplus of electrical energy to the distributor or directly on the market. If sold to the distributor, the owner of the installation receives a set payment in the form of a regulated rate, which is unique for all the periods of the programme, defined as a percentage of the average or reference electrical rate regulated in Royal Decree 1436/2002, of 27 December, which is therefore indirectly based on the production market price. Should the owner of the installation decide to sell his production or surplus directly on the market, he will receive the negotiated market price, plus an incentive for participating and a premium, if the installation is entitled to receive one. This incentive and the complementary premium are defined as a percentage of the average or reference electrical rate, although, in the enactment of the Royal Decree, this percentage is established on a case by case basis.

The Royal Decree 436/2004 improves the incentives for the first 200MW of solar thermal electricity production in Spain. Solar thermal electricity generators who cede their production to the distributor may receive as fixed tariff 300% of the reference price during the first 25 years after their startup and 240% afterwards. Solar thermal electricity generators who sell their electricity on the free market may receive a premium of 250% of the reference price during the first 25 years after their startup and 200% afterwards, plus an incentive of 10%.

This record supersedes:Royal Decree 2818/1998: "Special Regime"

Last modified: Tue, 02 May 2017 18:13:12 CEST