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Spain's New Renewable Energy Rules

Date: 28-May-07
Country: SPAIN

The following are some of the key points:

* Spain's Renewable Energy Plan 2005-2010 envisages 12 percent of Spain's energy consumption coming from renewable sources by 2010.

* The new rules guarantee a return of 7 percent to wind and hydroelectric plants that opt to sell power to distributors direct and a return of between 5 and 9 percent if they participate in the electricity pool market.

* Tariffs will be revised every four years taking into account whether objectives have been achieved for different types of energy and the evolution of costs.

* These revisions will not affect plants that are already in operation. This provides a secure and stable legal framework and fosters development, the Industry Ministry said.

* The new regulations will not be retroactive. Those plants that come into operation before Jan. 1, 2008 will be able to keep the previous fixed tariff regime for the whole of their life.

Those that participate in the pool will keep the previous regulation until Dec. 31, 2012.

* Cogeneration, which typically uses left over heat from industrial processes to produce electricity, will get higher returns and will have them revised every quarter.

* Larger solar power installations will practically double their returns, receiving a guaranteed return of 7 percent, while those under 100 kW ones will stay the same.

* Renewable technologies such has biomass, biogas and thermosolar power, which need a special impetus, will receive higher returns of 8 percent if their production goes direct to distributors and between 7 and 11 percent in the pool.

* New wind power parks will have to be built to withstand falls in tension in the grid without automatically disconnecting.

* Existing parks that install this technology will be eligible for extra premiums for five years.

* The government will draw up a new renewable energy plant during 2008 to cover 2011-2020.

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