Paper read at 4th Atlantic Workshop on Energy and Environmental Economics (A Toxa, Spain), 07-2010. Lara Pérez Dueñas, GNERA Energía y Tecnología. Lecciones aprendidas del sistema español de apoyo a las renovables basado en un sistema de primas y tarifas. *** The Spanish economic support system for electricity from renewable energy sources has had a good reputation due to its good results in terms of number of new plants, installed megawatts, industrial development, etc. Nevertheless, in the last years we have assisted to major and sudden legislative changes motivated by different events that have put under discussion the system sustainability. After describing the main green electricity support systems available and the benefits of introducing renewable energies in the electricity market, this paper analyses the causes of the “boom and burst” of the Spanish support mechanisms and the main lessons learned.

1. Supporting ‘Green’ electricity:
Lessons learned from the Spanish Feed‐in tariff system
Lara Pérez Dueñas
Gnera Energía y Tecnología. Energy Consultant and Energy & Environment Engineer
lpd@gnera.es
ABSTRACT
The Spanish economic support system for electricity from renewable energy sources
has had a good reputation due to its good results in terms of number of new plants,
installed megawatts, industrial development, etc. Nevertheless, in the last years we
have assisted to major and sudden legislative changes motivated by different events
that have put under discussion the system sustainability. After describing the main
green electricity support systems available and the benefits of introducing renewable
energies in the electricity market, this paper analyses the causes of the “boom and
burst” of the Spanish support mechanisms and the main lessons learned.
JEL code: Q4
Key‐words: electricity market, renewable energy, feed‐in tariff, renewable energy
support instruments
I. GREEN ELECTRICITY SUPPORT INSTRUMENTS
Costs and benefits of renewables in the electricity market
A sustained development of renewable energy (RE) is nowadays still not possible
without the support of dedicated policy instruments. Much debate has been made to
argue if renewable energies are ‘too expensive’ or not, leading to even emotional
debates. Actually, the use of electricity from renewable energy sources has several
direct and indirect effects on energy costs, as well on economics and social issues.
Their quantification can allow us to have a more global vision of the incentives paid to
renewable electricity producers. Let us briefly describe some of these positive and
negative effects:
- Environmental externalities: Actual energy costs do not include environmental
externalities: health issues, energy dependency, energy resources depletion,
supply and public security, accidents, climate change, global justice…
- Economic and social benefits: Deloitte (2009) in its study on the
macroeconomic impact of wind energy, compares the direct cost of incentives
for wind power in Spain to other quantified benefits such as CO2 emissions,
fewer fossil fuels import and other indirect economic and social benefits such
as new job creation, direct and indirect increase in PIB, R&D… Morthorst (2010)
also states that “if both the direct and indirect cost savings from renewable
energy generation were taken into consideration, the net effect of the RES

2. support scheme would be negative, that is, the consumer would pay lower
prices.”
- Merit order effect: The introduction of renewable energy in an electricity
market where price setting is based on merit order can result in lower
electricity spot prices for consumers and eventually (but not necessarily) in
lower retail prices, as will be further discussed.
- Opportunity cost due to additional operating reserve: Most renewable energies
are said to be “not administrable”, i.e. we cannot regulate their production on
demand as it depends mainly on weather conditions (wind, sunlightning or
rain) or on the lack of flexibility of the plant –which is also the case for nuclear
power. Thus, we need to grant an additional operating reserve that will ensure
the electricity supply on peak hours. Combined cycles are a valuable technology
for operating reserve because of its high flexibility. Spain has bet on this
technology and has greatly increased the installed capacity of combined cycles
in few years. These plants, with a high marginal cost, are used increasingly as
operational reserve due to the development of non administrable energies,
causing them to be shut down most of the time, thus reducing its efficiency and
its profitability.
‘Green electricity’ support instruments
The theoretical start point of renewable energy economic support in the electricity
market context is the existence of externalities for environmental, security and health
associated costs in conventional energy plants (Finon et al, 2004).
Putting it into other terms, the goal is to ensure the development of the technologies
until grid parity is reached. Grid parity is defined as the point where renewable
electricity is equal or cheaper than the reference cost for grid power. This point could
be achieved by 2016 for Spanish PV, and will differ for different technologies and
countries. Nevertheless the achievement of grid parity does not have to mean the
removal of incentive regimes (KPMG, 2009).
To overcome this “market failure”, the first idea that comes into mind is to introduce a
direct pollution tax to make producers pay for actual environmental costs, for example
a CO2 emissions tax. Other instruments have been developed that differ from a
genuine “green tax”, but which pursue the same objective, in environmental and
economical terms, such as:
- voluntary market based on a certification for renewables, which consumers will
buy with an extra cost (“origin guaranties”)
- granted costs for every renewable kWh
- tendering systems
- quota exchange systems

3. In Europe, Member States are required by different Directives to support electricity
from renewable energy sources. Countries are given freedom to choose their
preferred support scheme. Given different national priorities and segmentation in
electricity market (despite the market opening since early 2000’s), the support
schemes differ in each country and we can state that the 27 Member States operate
27 different support schemes. No harmonisation is foreseen at the short‐middle term,
and a coordinated approach is preferred (European Commission, 2008).
Implemented policy tools in Europe and worldwide can be divided into two main
categories: price‐based instruments and quantity‐based instruments. Price‐based
instruments (as Feed‐in Tariffs or Premiums, as developed in Germany, France or
Spain) will fix a price for electricity, and the quantity will be determined by industry
development and market evolution. Quantity‐based instruments, on the contrary, will
fix an established volume of energy or power for the country, communities or
companies, and the price will be set by the competition between operators. Examples
for quantity‐based instruments are green certificates (UK, Belgium, Italy, Sweden) or
tendering systems (Ireland, France).
FIT and premiums
In a Feed‐in Tariffs (FIT) scheme, producers are granted an amount of money for every
kWh generated. This can be a fixed tariff or a premium paid on top of the electricity
market price. The utility is obliged to purchase all electricity generated, or to give it
preference, with the generator obliged to sell all electricity generated to the utility.
The tariff or premium is granted for a long period of time, typically 15‐20 years. This
provides a long term degree of certainty, thus lowering the market risk. Rates can be
differentiated based on RE source, technology type, capacity size, the date the system
becomes operational, or location of the project. Tariff adjustments can be made in the
future, based on inflation or on installed capacity or generation costs (Burgie, 2009).
Quota Obligations
Under a quota obligation, governments impose an obligation on consumers, suppliers
or producers to source a certain percentage of their electricity from renewable energy.
This obligation is usually facilitated by tradable green certificates. Accordingly,
renewable electricity producers sell the electricity at the market price, but can also sell
green certificates, which prove the renewable source of the electricity. Suppliers prove
that they reach their obligation by buying these green certificates, or they pay a
penalty to the government (European Commission, 2008).
Theoretically, this system could have great advantages that have led to a keen interest
for green certificates in the last years: it is in the line of electricity market and is
financed directly and equally by the operators.
Nevertheless, it results on high transaction costs and high risk associated costs, which
have been poorly taken into account in the past. Moreover, quota obligations benefits
the lower cost technologies, already mature, but doesn’t support emerging
technologies with a great potential.

4.
Tendering
In a tendering system, the Government sets an objective for the energy mix and tries
to reach it trough a succession of tenders. As a result, the producer will get a long term
contract at the price set in its bid, with a buying obligation for Utilities. The proposals
are ranked from low to high until the auction is reached.
Theoretically, tendering would allow a better control of quantities that have to be paid
to renewables, would limit global costs as they support in the first place the lower
costs technologies and would stimulate innovation. In practice, nevertheless, the
experiences have not been so positive.
Other systems
Other instruments, such as voluntary agreements, CO2 taxes, investment incentives or
Fiscal incentives (tax exemptions or reductions), obligations on fuel suppliers, public
procurement policy, research and development... are mainly used as a complement, in
addition to the main support scheme.
Comparison between support instruments
The European Commission (2008) has measured the success of a policy with its
effectiveness in increasing renewable electricity generation and by the level of
payment received by generators in comparison to the level they require for
profitability.
As a general rule, the criteria for evaluating the support system quality can be summed
up as: 1‐a reasonable cost for community, 2‐system stability, 3‐avoiding administrative
barriers and 4‐ensuring grid access.
As we will further discuss, although the Spanish system was well rated in the 2008
European Commission's study, in practise some of these criteria have not been met,
resulting in most of the problems attributed to Spanish FIT.
Today, FIT is the most prevalent renewable energy policy in the world. In Europe, with
the recent shift of the United Kingdom towards a combination of ROC (renewable
obligation certificates) and FIT, 70% of member states have implemented a feed‐in
tariffs policy. Worldwide, forty‐five countries had adopted this kind of system in 2008
and even in North America, traditionally reluctant to tariff systems, FIT policies have
been implemented in some US states and in a Canadian province (Ontario) and are
being carefully considered in a number of other US states (Burgie, 2009).
The European Commission has been very favourable in the past to green certificates
instruments, but has evolved in its lasts reports: “Comparing the two main types of
support schemes, namely quota obligations and feed‐in tariffs, historic observations
from EU Member States suggest that feed‐in tariffs achieve greater renewable energy
penetration, and do so at lower costs for consumers.” (European Commission, 2008)

5. Tendering was in place in the UK at the time where Germany and Denmark started
their wind development through a feed‐in tariffs system. The comparison between
wind industry developments in all three countries is clearly in favour of FIT (Finon et al,
2004). Nowadays, it is generally considered that tendering is not a well adapted
instrument to build a renewable energy support policy except as a complement for
other instruments (Hadjsaïd, 2009). In Denmark, for instance, tendering is used as a
stimulus for the development of a particular technology –off‐shore wind.
II. THE SPANISH FEED‐IN TARIFFS SYSTEM
Spain has bet on Feed‐In tariffs since early 90's, following Germany and becoming a
world pioneer and leader in this kind of policy.
The basis for the current FIT system was established in 1994 for small capacity
facilities, obliging utilities to buy the renewable electricity surplus at a price that
depended on retail price. With the opening of the market, developed with Royal
Decree (RD) 2818/1998, the producers could sell their energy directly in the market or
at a fixed tariff. Later, RD 436/2004 introduced the obligation of forecasting when
penalizing deviations between energy prediction and real production, and gave the
possibility of choosing between a fixed tariff or the market price plus a fixed premium.
RD 661/2007 separates finally the support from the reference electricity price (the
tariff or premium is not a % of the electricity price any more). It also introduces a cap
and floor for some technologies to avoid a too high or too low retribution due to
possible strong fluctuations of spot market price. In 2008, RD 1578/2008 introduced a
quota and registry for solar plants, which was also applied for the rest of the
technologies included in the “Special Regime” (i.e.: all renewables and CHP plants with
less than 50MW) in 2009. In 2010 a new Royal Decree is expected to come.
Next, will be described the most relevant differentiating characteristics of Spanish FIT
and its evolution.
• Electricity market agents
Since the liberalisation of the market, the different agents have to be juridically
separated to avoid vertical integration. The following agents participate in the
generation market:
- Producer
- Independent System Operator (REE): is in charge of the technical management
of the system and of the security of supply
- Independent Market Operator (OMEL)
- Independent regulatory body (CNE): regulates the system and centralises all
the information
- Utilities: own the lines and distribute the electricity
- Representative agent: acts as the speaker between producers and other
agents.
It is interesting to note that the representative agent is given the possibility to have a
so‐called “portfolio effect”, i.e. to send predictions of many plants in the same

6. programme unit (like a virtual plant), thus consolidating its deviations. This leads to an
easier management of supply for the System Operator, as well as reduced deviations
costs for generators.
• Choosing between tariff or market
A big particularity of Spanish FIT system is that producers can opt for either getting a
fixed tariff per kWh produced or being paid a premium on top of market price.
Premium FITs have the advantage of introducing competition between producers in
the electricity market and helping to give an incentive to renewable electricity
production during peak periods. To avoid excessive costs when prices rise or too low
income for producers when prices sink, Spain has introduced in 2007 a cap and floor
system which “restrains” the final price. Today, cap and floor exists for wind power,
small hydropower, biomass and biogas, whereas photovoltaic can opt only for a fixed
tariff.
Caso de Tarifa Regulada b.7.1
Caso de la opción Mercado + Prima
Precio Horario Electricidad (€/MWh)
140
90
80
120
70
100
60
Prima opción Mercado (€/MWh)
50 Prima Equivalente 80 Precio horario Mercado (€/MWh)
Precio horario Mercado (€/MWh)
40 Techo
60
30
Suelo
20 40
10
20
0
H1 H2 H3 H4 H5 H6 H7 H8 H9 H10 H11 H12 H13 H14 H15 H16 H17 H18 H19 H20 H21 H22 H23 H24 0
Horas H1 H2 H3 H4 H5 H6 H7 H8 H9 H10 H11 H12 H13 H14 H15 H16 H17 H18 H19 H20 H21 H22 H23 H24
Figure 1: Illustration of the two market options: fixed tariff and premium on top of spot price with cap
and floor. For tariff option, the (variable) difference between tariff and spot price is called
“equivalent premium”
• Forecasts
Few countries require RE generators to forecast their output and to provide this
information to grid operators (Spain, Slovenia, Estonia): since November, 2009,
Spanish generators over 450kW are required to forecast their generation 24 hours in
advance, or through the intraday market (until that date, forecasting was requested
only for plants bigger than 1MW).
However, only Spain charges generators if their actual electricity output deviates from
their predictions. A deviation may incur in a penalty if this deviation goes against the
regulating system. That means that if a generator has produced more energy than
forecasted, and that the global system has less energy than predicted, then the
deviations of this particular generator will have no cost, and vice‐versa.
• Daily markets
To allow better adjustments of forecasting and actual production, and to sharpen the
System Operator regulation, several markets have been established:
The day‐ahead market (spot market) is a physical market in which prices and amounts
are based on supply and demand. It takes place in one daily session and fixes the
trading for the 24 hours of the next day.

7.
The intraday market has been established in order to introduce adjustments to the
day‐ahead market. This way, the operators can adjust the forecasts to the real
production, resulting in a better regulation of power market and reducing the
deviations. It is developed in six different intraday sessions, and the new bids or
adjustments to the spot market can be introduced three to four hours before the next
session.
In addition to these, technical restrictions and deviations from predictions are
regulated through a regulating power market and a balancing market, with different
prices.
• Differentiated support levels
Tariff levels have been set to get a rate of return of 7% after tax (Kema, 2009). Both
the tariff and premium option are differentiated by technology and by size ‐through
capacity thresholds‐ to take into account economies of scale in larger plants. Capacity
thresholds, however, instead of linear capacity progression can lead RE developers to
size to the limit of the highest rate, focusing on capacity rather than actual output
(Burgie, 2009). Note that Spain was the first country to introduce a FIT for solar
thermal technology.
Whenever the fixed tariff option has been chosen, generators can receive
differentiated FITs for peak or off‐peak hours. CHP (incl. biomass CHP) in peak hours
will receive a bonus of +37% of the tariff and a penalisation of ‐36% in off‐peak (small
hydro and biomass can have a more limited bonus and penalisation).
Moreover, to discourage speculative queuing grid access deposits are required:
500€/kW for photovoltaic and 20€/kW for the rest of the special regime.
Note that biomass pricing has been difficult. At first, market for biomass did not
respond to FIT comparably to solar or wind, as happened as well in Germany (Kema,
2009). This technology, with slower reaction times and very particular challenges (fuel
supply logistics, feed stocks, diversity of technologies, etc.), needed a higher support
level and longer to be pushed up. Now in Spain we assist to an incipient but
generalised development in the whole country of biogas and waste biomass plants.
In case of voltage dips (short drops in voltage in a system), a decoupling from the grid
is required for security reasons. This can lead however to the decoupling of a whole
wind farm, which can totally destabilise the electric system. There has been a great
effort made in Spain (although not yet implemented in Portugal, which affects the
Iberian electric system) to make wind power farms able to ride through these electric
faults. Wind installations capable for short drop in voltage may perceive an economic
incentive. Thus, according to Red Eléctrica de España, in 2009 the biggest wind power
loss due to voltage dips has been 700MW despite having a total installed capacity of
19.000MW. This complement may be introduced also for photovoltaic in the future.
• FIT adjustment and revision

8. In Spain, the tariffs and premiums are fixed for the entire life of the plant. The level of
support decreases however for some technologies: after 15 years for biomass and
biogas, and after 25 years for photovoltaic.
These tariffs are planned to be inflation adjusted yearly according to the consumer
price index (CPI) and fuel prices. This is a way to protect investors, which are
committed to renewable energy project for as much as forty years (Burgie, 2009).
Revision is a broader process in which the FIT may be substantively altered. RD
661/2007 established that, as 85% of capacity cap for 2010 would be covered, they
would be given at least 12 months to receive the same tariff, which happened for solar
already in 2007. Table 1 shows the rate of fulfillment of these caps in April 2010, and
shows that the 85% capacity cap has been exceeded for solar and for wind.
Installed Capacity cap Rate of
capacity (MW) (MW) fulfilment (%)
CHP 6.312 9.215 68%
Solar PV 3.472 1.331 261%
Solar termal 136 500 27%
Wind 18.401 20.155 91%
Wind (repowering) 0 2.000 0%
1.405 2.400 59%
Small hydro =< 10MW
Biomass 510 1.317 39%
Biogas and manure 180 250 72%
Solid waste 279 350 80%
Table 1: Capacity caps and rate of fulfilment in April 2010 (CNE, 2010)
• RE Quotas
After the unexpected boom of PV in 2008, the government decided to set a solar
quota, not only through a new cap for 2009, 2010, and so on, but also with the
addition of a registry that will keep record of each new project. If the quota is reached,
the actual tariff decreases each year 10%, starting in 2009 with 32 c€/kWh.
This quotas and registry system was extended to the rest of the Special Regime in
2009, to break down an incipient “bubble” in solar thermal technology.
Analysis of the Spanish case and lessons learned
If we analyse the development of renewable electricity in Spain with its FIT system in
terms of its effectiveness in increasing installed capacity and energy generation, the
results are quite spectacular (Figure 2). Nevertheless since 2007 we have assisted to
several sudden changes in regulation that show the difficulties of the system adopted.
Let us analyse this turbulent evolution and other critics raised to Spanish FITs.
1. The evolution of RE installation and of changing legislation

9. 35.000
30.000
TRAT.RESIDUOS
25.000
RESIDUOS
20.000 BIOMASA
HIDRÁULICA
15.000 EÓLICA
SOLAR
10.000
COGENERACIÓN
5.000
0
90
92
94
96
98
00
02
04
06
08
19
19
19
19
19
20
20
20
20
20
MW
Figure 2: Evolution of installed capacity of technologies in Special Regime in Spain (CNE, 2010).
Despite a relatively stable policy in theory (Spain is the only country to date where
tariffs are granted during the whole lifetime of the installation), investor certainty has
not been provided.
If we look at the boom and burst of solar PV in Spain, we see that in august 2007 the
85% of the 2010 capacity cap set for solar had already been reached. A revision of
tariffs was expected for September 2008, but the new tariff was not known before.
This led to a great uncertainty among project developers, who rushed to complete PV
projects on time for fear of getting a lower tariff (which could have even lead to fraud
in some cases). This caused a spectacular increase in PV capacity in 2008 (Figure 2)
and caused the developers rush installing new plants which could lead to an
overdevelopment and lock‐in of inferior technologies at the best resource sites. As he
himself claimed, the government had relied on the forecasts of industry associations
and could not keep track of the actual projects that were being installed. The 2008
result was therefore a surprise for them. Actually, in 2010 the 2010 capacity cap has been
exceeded by a 261% (Table 1). After this, the government decided to create a registry
for new projects (first for photovoltaic, and then for the rest of technologies), as
described before, and a degressive tariff after the reach of a quota.
The uncertainty goes on today: a global revision of retributive system seems to be
currently on the table, but no official draft has been released yet. In 2010 after
denunciation in press of possible frauds in PV, rumors have been circulating on radical
tariff cuts and even on the possibility of being retroactive, which have lead to a
collapse on the stock exchange for renewables industry and to the halting of new
investments. In 2010 is also expected a new “Renewable Energy Plan” (former plan
was in force 2005‐2010) and the revision of the Special Regime Royal Decree.
On the other hand, the tariff set for PV has been criticised for being set too high from
the outset (similar tariffs than in Germany with much more sunshine). A balance has to
be found between a sufficient FIT that will allow the development of a yet unmature

10. technology and a too high tariff that incentivise a technology still inefficient,
uneconomic or even speculative.
2. Cost for the community
Despite a rise on fuel prices and therefore on generation costs and electricity prices, the
consumer tariffs where not correspondingly increased by the government. This decoupling
between the electricity tariff and the actual cost was made possible with the RD
1432/2002 and has created the so‐called “energy deficit”: difference between the amount
collected from consumers through the tariff set by the Government and the actual costs of
generation, transportation, distribution, etc. The different items included in this cost and
their distribution in volume are detailed in Figure 3. This deficit will be amortized in the
next years, therefore it is a debt to be paid for future consumers although created by
current consumption.
Special Regime FITs were included into this consumer’s tariff, representing 37% of 2010
total costs. Even if the rise in renewables and CHP retribution cannot be considered the
sole cause of the energy deficit, the exponential increase of solar in 2008 with its high
retribution had a relevant impact on the actual costs and therefore on the deficit. Thus,
the Government himself stated in the decree 1578/2008, despite his declared
commitment towards renewables, that "Energy sources under this special regime
constitute a risk for the system's sustainability because of their effects on power prices."
This suggests that RE were blamed for the energy deficit, as the tariff has not risen that
much.
The total payment for renewables and CHP amounted in April 2010 €660 million, from
which FV and wind power were both paid about €210 million. For 2009 tariffs and
premiums paid for RE amounted for 5.000 million (CNE, 2010).
The energy deficit, however, is not circumstantial but really structural, as it has been used
by the government as a strategy to fix a consumption tariff whose maximum rise was
determined in advance: electricity rates were kept artificially low.
Otros costes
Servicio gestión 3%
interrumpibilida
d
Transporte
3%
9%
Primas Régimen Distribución
Especial 31%
37%
Déficit tarifario
Moratoria 11% Compensación
Nuclear extrapeninsular
0% 6%
Figure 3: Distribution of the different costs in the access toll of consumption electricity tariff (BOE, 2009)

11. 3. Impact on prices: reaching zero spot prices
Figure 4 describes the price fixation based on merit order, while crossing demand and
supply curves. The demand curve is inelastic; therefore minor changes in the supply
can result in major price changes. As renewable power, like wind or solar, has a low
marginal cost due to zero fuel costs, their bids enter the supply curve at the lowest
level. This shifts the supply curve to the right, resulting in a lower power price. This
‘merit order effect’ can range, according to various studies, 3‐23€/MWh for wind
power (Morthost, 2010). The total amount of savings made due to the wind power
penetration has been evaluated within a range of €1.3‐5 billion per year in Germany or
€0.1 billion for 2006 in Denmark.
Figure 4: Demand and supply curve for price fixation (www.omel.es)
In Spain, GELABERT et al. (2009) have concluded that an increase in the generation of
renewable energy sources under the Special Regime by 1 GWh would result in a
decrease on electricity prices by around 2.5 Euros on average, or around 5%. However,
the decrease of electricity price (pool) will not directly affect consumers, as price is set
by tendering.
It is nevertheless important to note that this effect can be just temporary because
“when this decrease in electricity prices takes place, the signal for investment is also
reduced and thus future investments are reduced, bringing about a subsequent
increase in electricity prices. In addition, when market power exists, traditional
producers may bid higher in order to keep the price level as before” (GELABERT et al,
2009).
The merit order effect can eventually result in zero spot prices, part of which can be
attributed to renewable power generation. Low or zero spot price results in lower
incomes for generators, but also in a lower cost for the general system. Nevertheless,
Spanish government and energy producers consider this as a failure of the system and
ways of avoiding it are being discussed. The whole electricity system could be revised
and Special Regime could be taken off the spot market.

12. During the first four months of 2010, Spanish market has experienced 293 hours of
zero spot prices (CNE, 2010), i.e. 10% of the total amount of hours. This can be
attributed to the high production of wind and hydro power and a lower demand.
To finish, we can note that the Spanish system “special regime” has not been thought
for broad distributed generation. This makes Spanish goals different from Germany
(where one third of Germany’s wind power is owned by 200.000 local landowners) or
Denmark (where 150.000 families own 80% of installed turbines) (WFC, 2009). This is
not necessarily a planning error, but makes it more difficult to implement a distributed
generation system where renewable energies supply local demand and go beyond the
problems created by a centralised regime.
III. FINAL REMARKS
Spain has embraced more than 15 years ago a green electricity support policy which
has since then proven to be one of the most efficient tools for promoting renewable
energies in the electricity market. This pioneer position can explain some of the
difficulties experienced by the successive governments which have lead to a major
discussion on the sustainability of the system.
Anyway, difficulties should not make us forget the innovative and interesting solutions
implemented in Spanish market to ensure a great and high quality integration of
electricity from renewable energy sources: ‘Green’ electricity represented almost 40%
of the electricity generation in April 2010.
The main difficulty is perhaps the lack of a consistent, clearly defined, long‐term
strategy, which leads therefore to a great uncertainty for investors and project
developers.
It is certain that it is difficult to adjust a tariff from the outset for a new, immature
technology as was the photovoltaic; but effectively the tariff seemed to have been set
to high, without a good capacity cap control, encouraging uncontrolled development
and promoting quantitative capacity increase at the expense of quality and with an
exponential costs escalation. A well defined revision mechanism and a degressive
tariff, among other measures, could have helped.
An additional problem was the decoupling between actual generation costs and
consumers tariff due to a political decision to contain the tariff rise. As the amount
paid to FIT system grows, the debt for future consumers due to energy deficit has to be
kept, entering a vicious circle.
Again, the numerous and sudden legislative adjustments to try to solve the detected
problems have contributed to investors uncertainty. 2010 might be a key year to solve
this uncertainty and design a new, re‐adapted system.

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de acceso a partir de 1 de enero de 2010 y las tarifas y primas de las instalaciones de
régimen especial
BURGIE, B. and CRANDALL, K. (2009): The Application of Feed‐in Tariffs and Other
incentives to Promote Renewable Energy in Colorado, Colorado Public Utilities
Commission, Denver
CNE (2010): “Informe mensual de ventas de energía del régimen especial”, 10/04/2010
COMISIÓN EUROPEA (2008): The support of electricity from renewable energy sources,
SEC(2008)57.
COMISIÓN EUROPEA (2009): The renewable energy progress report, SEC(2009) 503 final.
DECC (2010) : Feed in Tariffs. Government’s response to the Summer 2009 consultation,
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FRONDEL D., RITTER, N. and VANCE, C. (2009): Economic impacts from the promotion of
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HADJSAÏD, N.(2010): La distribution d’énergie électrique en présence de production
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