Future power system architecture

Spain Looks To Self-Generator Levies

The Spanish government is proposing the introduction of a levy for own energy generation.
Published: Thu 16 Jul 2015

In response to representations by utilities in the United States, increasingly jurisdictions are introducing charges for consumers who generate their own energy. These are intended as a contribution towards their use of the transmission and distribution infrastructure and to limit the skewing of the costs on the non-self-generation consumers. [Engerati-Energy Industry In Crisis – Utilities Beware]

Now this concept, which seems fair as long as these consumers remain grid connected and rely on their utility for back-up power, is being introduced in Spain. But it is not going down well with consumers.

Spain to tax PV

The proposals from the Spanish Ministry of Industry, Energy and Tourism, which appear to form part of a proposed new renewable energy programme, are aimed to “regulate self consumption so that all consumers are on equal terms” in order to “guarantee the economic sustainability of the system”, a ministry release states. Under the proposals, which also cover other aspects of residential and business distributed generation, low voltage consumers will be levied a fixed charge from €9 to €32 per kilowatt, depending on the system size and network tariff regime. For large consumers the charge will range from €36 to €3 per kilowatt.

Consumer backlash

According to a Greentech post, there has been significant backlash to the proposals with tens of thousands of signatures on petitions and even a call for the minister’s resignation in a petition that had gathered 153,000 signatures.

In the online el periódico de la energía, Daniel Pérez of the business law firm Holtrop writes that the proposals contain several illegalities and that they are aimed at discouraging own generation. Government is firmly on the side of the large power companies, he writes, quoting figures from the Spanish Photovoltaic Union (UNEF) that the impact on revenues has been greatly exaggerated. UNEF’s calculations indicate that for every 200MW of consumption (in 2014 a maximum of 22MW were installed), revenues of €21 million, amounting to 0.05% of total system costs, would be reduced.

In its response to the proposals, UNEF, which claims to represent 85% of the installed solar PV capacity in Spain, makes similar comments and says the proposals are discriminatory when compared to other energy saving and efficiency measures such as cogeneration and the use of efficient appliances. UNEF also note an extra levy for systems with storage, although this isn’t obvious in the draft document.

‘Tax on the sun’

Time will tell what happens next, and to what extent the proposals will be enacted. In his comments Mr Perez believes the proposed decree is bound to fail as the current government’s days are numbered, with an election coming up in November, and even if the proposals do go through they are unlikely to be maintained by a future government.

Whatever the legality or otherwise of the other provisions, a “tax on the sun” as UNEF calls the levy is likely to be seen increasingly, not only in the US but elsewhere. The trick will be to keep it at a level that meets the utility claims while also not disincentivizing consumers from investing in the technologies.

It is also likely that recommendations and guidelines, if not a regulation,on self generation will emerge at the European level.

Further reading

Ministry of Industry, Energy & Tourism: Draft Royal Decree on Auto-consumption

Greentech Media: Anger Grows Over Spanish Law Designed to Halt Residential Storage

el periódico de la energía: Borrador de autoconsumo: un último servicio (fallido) al oligopolio eléctrico