Spain published the interim regulatory revision for wind energy assets

edpr announcement

Spain published the interim regulatory revision for wind energy assets

Wednesday 22, February 2017
Investors
Market Notifications

The Spanish Government published today, in Boletín Oficial Del Estado, the Order ETU/130/2017 which includes the interim revision of the parameters to remunerate the renewable energy assets, under the remuneration framework that was approved by the Royal Decree 413/2014 ("RD 413/2014") of June 2014.

Madrid, February 22nd 2017: The Spanish Government published today, in Boletín Oficial Del Estado, the Order ETU/130/2017 which includes the interim revision of the parameters to remunerate the renewable energy assets, under the remuneration framework that was approved by the Royal Decree 413/2014 ("RD 413/2014") of June 2014.

According with the Order IET/1045 approved in 2014 the remuneration was structured in order for a standard asset to receive a pre-tax return of 7.4% in the first regulatory period, from 2013 to 2019. To achieve the defined pre-tax return, the standard asset receives a remuneration to investment in addition to the electricity market price.

The 3 year interim revision period (2017-2019) of the parameters includes:

  • Wind profile coefficient: from previous 11.11% to 14.79%
  • 2014-2016 regulatory adjustments: difference between actual market price and forecasted market price and reference caps and floors for the standard production envisaged in Order IET 1045/2014
  • Market price (€/MWh): forecasted pool prices with defined caps and floors for the standard production, such that:
€/MWh201720182019≥2020
High Cap49.8148.3048.6860.00
Low Cap46.3344.9245.2856.00
Central Scenario42.8441.5441.8752.00
High Floor39.3538.1638.4648.00
Low Floor35.8734.7835.0644.00

Standard production (MWh):
1) is exposed to prices fluctuations when the wholesale price is between the "High Floor" and the "Low Cap"
2) benefits 50% when the wholesale price is between the "High Cap" and "Low Cap" and are 50% protected of the price between "High Floor" and "Low Floor"
3) isn't exposed to prices fluctuations when the wholesale price is higher than the "High Cap" or below the "Low Floor"

As a consequence of the above, remuneration to investment (see Annex I) for EDP Renováveis ("EDPR") will increase from €158 million per year, in place from 2014 to 2016, to €182 million per year from 2017 to 2019. The €182 million per year includes €2 million per year from regulatory adjustments already accounted in the 2014-2016 period.

Annex I – Remuneration to Investment

The remuneration to investment depends on the entry into service of the asset and is defined based on a standard asset for each year, such that:

DateRemuneration to Investment (€ thousand/MW)
<20040
200422.8
200533.8
200655.0
200786.7
2008119.2
2009127.2
2010136.1
2011120.1
2012115.8
2013111.9