It’s an ill wind… that benefits the electricity companies

Alvaro Ok

Dr. Álvaro Luna

The winds of change indicate that the next government will repeal Royal Decree 900/2015, regulating the administrative, technical and economic conditions of methods of electricity supply based on self-consumption and production with self-consumption, so that it will never be applied. Nevertheless, the 8th of April has been and gone: the day that marked the end of the six-month moratorium established in the Decree. The Decree was the final bomb dropped in the last legislative session, characterised by hostile control of renewable energies. It is, as the saying goes, oœan ill wind that blows nobody any good… in this case, the electricity companies will stand to benefit.

The decree on self-consumption, which was described by the Spanish National Energy Commission (CNE) as “discriminatory” against renewable energies, not only affects the installation of new self-consumption systems, but also acts retroactively, so that self-consumption installations that were already legal must go through legalization procedures again, leading to further administrative costs, and costs derived from any required changes in the installation. In addition, since the draft bill first loomed over the sector in 2013, it has managed to generate fear and halt new initiatives.

TIME RAN OUT

Time ran out several weeks, or perhaps even months, ago for all those who have installations of this kind and had hoped for change in some of the political parties with seats in parliament. Clearly, in the political arena, renewable energies are no more than a photo at a world summit or four tweets, if that, during “Earth Hour”.

The renewable energy deficit is the most hackneyed tag line to justify the decree to tax renewable energy production, even when it is not fed into the grid. This tax is known as the ‘sun tax‘, given that it has the greatest impact on the photovoltaic sector. It is a formula supported by the main electricity companies to compensate for loss in consumption. However, such companies openly admit that they already charge for this concept in a fixed fee for contracted power included in electricity bills. Consequently, there is a difference in saving a watt via self-consumption or buying energy-saving lightbulbs.

In Spain today, a person who wishes to buy more efficient electrical appliances or change lightbulbs for ‘leds’, only needs to go to the shop to purchase them, something that everyone should do of course, as part of their social responsibility. In contrast, if you opt for a self-consumption system, you must obtain a report on the installation from an accredited company; request a point of connection to the grid from the company; obtain a technical study on the connection point; contract and pay for the tasks of adapting the line; obtain the appropriate installation licence, certificate of completion, official installation record and statement of responsibility; and apply to be included in the register… all in all, a real bureaucratic adventure.

Although it is true that renewable energies in Spain cover around 37% of demand, it is also true that almost 30% are from hydraulic power stations, which have to achieve a difficult balance between social and energy use of water. A country that does not have its own energy resources and that, due to its geographic situation, has a low level of interconnection with other countries must optimise its production of renewable energies. Furthermore, it cannot turn its back on self-consumption, which makes the end user an active participant who will be more aware of energy in all respects.

DROP IN COSTS

Nevertheless, I am convinced that self-consumption based on renewable energies will survive after the Royal Decree. A similar situation to that found after the withdrawal of bonuses in 2007 will occur. This led to a sharp drop in the installation of renewable energy systems, which picked up again as costs gradually fell. Accordingly, in a few years’ time, the ‘sun tax’ will have less of an impact on the recovery of investments in self-consumption, as the price of photovoltaic panels, and that of the electronic systems required to connect them, is decreasing constantly.

Until then, Spanish companies will have to continue to look to other countries in which this sector is considered strategic, and make a huge effort not to lose a technology race in which others have been several steps ahead for a long time.

Dr. Álvaro Luna
Researcher at SEER UPC and Professor on the Terrassa Campus,
Universitat Politècnica de Catalunya (UPC),

Published in ElPeriódico de Catalunya on April 29 2016

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