CHP in 2014

2014 saw the culmination of the negative effects of the so-called Energy Reform starting with Royal Decree Law 1/2012 that imposed a moratorium on the entire Special Regime by almost prohibiting the development of new installations that had not already been authorised and by including them in Remuneration Pre-allocation Register pursuant to Royal Decree 661/2007.

However this moratorium was not enough as both existing facilities and those in operation were taxed under Act 15/2012 (December) on the electricity sold in the market (at 7% of its price) and on the fuel necessary to produce it (the Special Hydrocarbon Duty, also known as the “green cent”). Its effect has been to reduce the remuneration on electricity of the so-called Special Regime and increase the cost of production for cogeneration.

In December 2013 (RDL 9/2013), RD 661/2007 was amended that had established the remuneration on electricity under the Special Regime, eliminating the reactive and energy efficiency premiums from this remuneration (that they had been paying since the 1980s), that used to be an incentive promoted by RD 661 in 2007, and announcing the publication of a new economic Regime that would apply retroactively. Act 24/2013 has also been published defining the new standards for remunerating electrical energy produced by renewable sources and high efficiency CHP. The new remuneration contradicts the recently published RDL 2/2013 as it obliges a new regime based on the wholesale market to be compensated by a premium on investment (PI) and, for some technologies such as CHP, a premium on operations (PO). Both premiums must be established by a new Royal Decree to be published at a future date.

José Mª Roqueta
Honorary President of COGEN España

Article published in: FuturENERGY January-February 2015