Do the proposed amendments make L14/2010 compatible with directive 2009/28/EC?

In two days from now, on Wednesday February 9th, the Spanish Congress will vote on a series of amendments to L14/2010, proposed by two minority parties CIU and PNV (Catalan and Basque nationalists). You can read about the content of these amendments in earlier posts on this blog. In this article we analyse these amendments in the context of the compatibility of L14/2010 (Formerly RDL14/2010) with Directive 2009/28/2010. If adopted, will the amendments make L14/2010 compatible with directive 2009/28/EC?

The first proposed amendment, of the Second Transitory Disposition of L14/2010, containing the hour profile for RD661/2007 installations, changes these to 1375, 1808 and 1877 hours instead of 1250, 1644 and 1707 hours. This is a 10% moderation, but still harshly discriminatory if compared to the limitation of other, newer PV installations. This discrimination is caused by the structure of L14/2010: The "hour profiles" are discriminatory because the installations to which they apply are not homogeneous. They differ in production as well as in efficiency. I recapitulate: We have three different discriminations here:

1. Of installations pre 2008 and post 2008, the first are discriminated against the latter.

2. Of installations with high radiation and low radiation, the first are discriminated against the latter.

3. Of installations with high efficiency against low efficiency, , the first are discriminated against the latter.

Let's start with the last. Number 3: The discrimination of more efficient installations against less efficient installations. The Amendment of the Second Transitory Disposition of L14/2010, containing the hour profile for RD661/2007 installations tries to repair this. The equivalent production hours should refer to peak power instead of nominal power. This change is solving the efficiency discrimination for the hour profiles of pre 2008 installations, but this leaves this discrimination in place for post 2008 installations. [090211 PH: I stand corrected, it does solve the efficiency discrimination for both profiles]

Let's see about number 2, discriminations of installations receiving high solar radiation against installations receiving low solar radiation. The Inclusion of a new Final Disposition in L14/2010, obliging the Spanish Government to elaborate a new radiation map, in co-operation with the Autonomous Communities is designed to relieve this problem. It may relieve the problem, but it does not eliminate it. This proposed map is to used to determine the retribution for PV projects, at a detail level of at least municipalities. This is more of the same. It is the system of L14/2010 that causes discriminatory effects, this amendment cannot repair that. Even if this new map is very detailed, it's the very system of categories which is the cause of discriminatory effects. Discrimination number 2 is not resolved by this, nor by any other of the proposed amendments. The puppy shat on the carpet, and you are trying to mop it all up with a dry mop. Because you don't know what water is, or because you are a very nasty chap. Your carpet looks like the solution of the map discussed earlier: Dispersed in a very detailed manner, by still looking pretty shitty for the purpose.

Only a system which would determine the remuneration of each individual installation on objective criteria would solve the problem. Such a system should involve measurement of radiation at each installation.

The 1st type of discrimination mentioned herein before remains entirely untouched by the amendments. The differential treatment of pre and post 2008 installations is slightly eased, but still present.

Let's have a look at the other amendments. What do they have for us? The elimination of the paragraph 4 of the First Additional Disposition of L14/2010, thus not allowing for further modifications of the hour profile of PV installations. This is at least closing the door to further changes, I assume. Of course this amendment only intents to avoid future infractions of the directive.

The Amendment of the First Final Disposition of L14/2010, modifying table 3 of article 36 of RD661/2007 as to change the term of 25 years for installations of type b1.1 to 30 years. This does not make L14/2010 more compliant with directive 2009/28/EC. It eases the impact of it, as do the other amendments.

The last amendment to be discussed is the inclusion of a new Final Disposition in L14/2010, obliging the Spanish Official Credit Institute (ICO) to offer special finance to PV projects before April 30th 2010. These will be available only to SME's and people. Projects financed with money from private equity funds and the like are punished. The finance is to cover a maximum of 25% of the retribution of the installation over 2010, which is too little anyway. If you cut the return of the installations on average 20% during three years, and with a similar amount the years after that, you don't get very far with a loan of 25% of one year's turnover. It is either cynical to do this, or the senators who thought this up really cannot count. Apart from being cynical, this amendment introduces a new discrimination, which currently is not in L14/2010. It discriminates larger scale projects to smaller scale projects.

In general, if these amendments were to be approved, more efficient installations will still be hit harder and thus be punished by the system of L14/2010. Furthermore, if approved a new discrimination will be introduced in the Spanish measures to stimulate renewables.

Some damage control has been done, but this is still far from sufficient. The system is still arbitrarily hitting individual installations.

An interesting question raises with the amendment expanding the life span of installations from 25 to 30 years. Why is this done, if it doesn't resolve the issues with the directive? This is done because of Spanish jurisprudence issues emerged from the LSE (Electricity Sector Law), as discussed in earlier posts on this blog. I have been giving this a few thoughts, and think that the Spanish jurisprudence may not be entirely in line with the Directive. One of my next posts will be on this issue.

Please contact us if you are an affected party. We are preparing litigation for a growing amount of installations. The larger the group, the lower the cost. More info at recursoRDL@holtropslp.com