Last friday Spain took steps to cap the government’s growing debt to the energy sector restricting the pricing options for renewable firms. As part of this reform, renewable energy operators under the special regime are now forced to select, until February 15th and permanent for the remaining useful life of the asset, between two pricing options removing previous flexibility and potentially restricting future revenues.
One of these options, consists in a remuneration according with the feed-in tariff schemes for the remaining life of the installation. The other alternative is to operate under the market option with a remuneration based on the electricty wholesale market price without the renewable energy premium, cap or floor.
In addition, this reform contemplates that the index used to annually update all the regulated activities in the electricity sector will be the annual inflation excluding energy products and food prices.
Analysts said it is still soon to evaluate the final impact of the measures on renewable energy companies.
Source: Reuters and 4-Traders