The Government is preparing a ‘bonus’ for renewables that allows them to maintain the expected levels of profitability of their investments. The Ministry of Ecological Transition wants to prevent the sector from the loss of remuneration that is being caused by an over-installation of clean energy in a market with little growth in demand, which has ended up generating problems of energy discharge due to network congestion.
As the Executive itself recognizes, “Due to the large amount of renewable power installed in recent years, some nodes of the network are saturated in certain periods of the year” and are already forcing significant levels of renewable generation discharges.
According to data from the consulting firm Aurora Energy, 42 Spanish provinces have experienced a reduction in renewable generation on the grid during the last two years, nine of them representing 81% of the total reduction. Badajoz was the province with the highest spills identified annually in 2022 and 2023, with 21.7% and 16.9%, respectively.
So that the facilities covered by the specific remuneration regime do not see their annual income reduced or even completely lose their economic rights, the Executive will modify the definition of the number of equivalent hours of operation so that its calculation takes into account the energy that has not been able to be sold as a consequence of the solution of technical restrictions carried out by REE.
The new standard will also introduce negative prices – which began to be registered strongly last year – for the methodology for calculating said number of equivalent hours of operation.
With the high renewable penetration, there are facilities that have been conditioned to participate in the market during the hours of greatest demand, in which renewable generation is not enough, resulting in a key element of flexibility, such as biomass plants. .
In return, their equivalent hours of operation have been reduced. In order not to be penalized, it is considered that these facilities must receive remuneration for the entire operation even when their market participation is reduced. To achieve this, the Government has put on the table a reform that aims to configure an adjustment mechanism for deviations in the market price.
Ecological Transition defines the upper and lower limits around the estimated market price that has been considered in the remuneration parameters, so that when the average annual price of the daily and intraday market is outside said limits, it is generated, on an annual basis. , a positive or negative balance, which is called the adjustment value for deviations in the market price and which is compensated throughout the useful life of the facility.
At the end of said useful life or in the event of loss of the specific remuneration regime, the balances that have not been passed on will be paid during the six settlements following said date.
The Government also establishes for storage facilities obligations to be attached to the control center similar to those existing for generation facilities, as well as for demand connected to the transportation network, except for consumption of auxiliary generation services.
Additionally, another objective of the regulation is to incorporate into national law three aspects established in Directive (EU) 2018/2001: the general principle of integration of electricity from renewable sources in the electricity market under market conditions, the hierarchy of waste and the obligations of separate waste collection.
At the same time, the limit on direct carbon dioxide emissions for new high-efficiency cogenerations introduced by Directive (EU) 2023/1791 must be transposed. Finally, it is intended to improve the application of the adjustment due to impact on the return on investment. for biomass type facilities regulated in Order TED/526/2024, of May 31, which establishes the methodology for updating the remuneration for the operation of type biomass facilities. generation of electrical energy whose operating costs essentially depend on the price of fuel and their remuneration values ​​are updated to the applicable operation as of January 1, 2024.
The Government hopes to close the public consultation on this measure at the end of January and will subsequently have to receive the report from the National Markets and Competition Commission and the Council of State.
Endesa already connects 30 GW of renewables
Endesa, through its network subsidiary, e-distribución, has exceeded the figure of 30 GW of renewable capacity connected through its distribution network, a power that allows it to feed the consumption of almost 20 million homes and avoid emissions. of nearly 30 million tons of CO2. These are installations of small and medium-scale renewable energy producers and self-consumption that, in recent years, are increasing their weight on the map of renewable generation in Spain as a complement to industrial-scale generation. Its connection through the distribution network demonstrates the growing importance of the network in the energy transition process. Since 2020, almost 11 GW of distributed renewable capacity have been connected to the Endesa network with increasing progression in each of the years. which highlights the need to have a regulatory framework that promotes investment in networks and agility in the granting of permits.
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