Tenders / Auctions: Specific Remuneration Regime

• RD 413/2014
• Law 24/2013
• RDL 17/2019
• RD 650/2017
• RD 359/2017
• Order ETU/315/2017
• Order ETU/615/2017
• Resolution of 10 April 2017
• Resolution of 30 June 2017
• Order IET/1459/2014
• Order IET/1953/2015

In 2014, Spain introduced the Specific Remuneration Regime (RD 413/2014) to support RE installations with a premium which allows them to participate in the electricity market competing against the traditional power sources. The support scheme aims to grant a “reasonable return” to the RE projects. The last auction rounds organized under this scheme took place in 2017.
On top of the market price, the RE installations will receive the premium (the “specific remuneration”) comprising two terms. First, a term per unit of installed capacity that covers the investment costs that cannot be recovered through the sale of energy on the market. Second, an operating term that covers the difference between operating costs and market revenue. To calculate the remuneration scheme, the law will take an “efficient and well-managed company” as a standard installation and will calculate the standard market revenues, operating costs and investment costs that this standard company would have.
These values are connected to the “reasonable return”, which is defined as the average yield of ten-year government bonds on the secondary market for the 24 months prior to the month of May of the year prior to the start of the regulatory period, increased by a spread (300 basis points) (RD 413/2014). The remuneration parameters are established for regulatory periods of 6 years. The second regulatory period started on 01 January 2020 (RDL 17/2019).
RD 359/2017 and RD 650/2017 established a call for the granting of the specific remuneration scheme for new RE electricity installations in the peninsular electricity system for a total of 3,000 MW (not for non-peninsular territory, such as islands).
The special case of islands
There are specific regulations for the installations located in non-mainland territory, such as islands, to account for the different situation these territories face: lack of interconnection and higher costs (article 10 Law 24/2013). In these cases, the Specific Remuneration Regime can also include an incentive for investment when the installation entails a significant cost reduction in the electricity system.
In particular, the fifth additional provision of RD 413/2014 introduced a specific remuneration system with and investment incentive for new wind and photovoltaic facilities located in these territories. The allocation of this non-mainland support scheme shall also be through competitive mechanisms. However, the twelfth transitional provision of Law 24/2013, introduced an exemption: until 31 December 2015, the Government was allowed to grant the specific remuneration scheme without conducting auctions.
For instance, this exemption was introduced to allocate the remuneration scheme to wind power projects located in the Canary Islands for a maximum of 450 MW of installed capacity (Orders IET 1953/2015 and 1459/2014).

Installed capacity

Sliding feed-in premium

RD 650/2017 allowed the participation of developers of new installations only.
Besides, in the 2017 auction rounds, only developers of installations located in the mainland electricity system were allowed to participate (RD 650/2017).

RES-E producers who want to get the support shall participate in one of the auction rounds organized by the authorities. The auction has three stages: pre-qualification, qualification and the auction itself (Resolutions of 10 April and 30 June 2017).
In the pre-qualification stage, interested project developers shall submit an online request to the authority managing the auction (OMIE) (article 10 Resolution of 10 April 2017). Once pre-qualified, they will have the right to receive information regarding the auction, to participate in informative sessions and to be qualified in a later stage. If the pre-qualified party is interested in the auction, it shall submit a qualification request. Only qualified parties will be able to participate as bidders in the auction stage. Bidders must constitute an economic guarantee of 60 €/kW for the power for which they intend to bid (article 14 Resolution of 10 April 2017).
Bids will then be ranked and the successful bids will be awarded with the right to receive the support scheme. To perceive the support scheme the project needs to be realized by the indicated realization period, which varies with each technology.
In order to perceive the remuneration scheme, the awarded installations shall be registered first under the Pre-Assignation Register, for which it is necessary to deposit an economic guarantee to the Directorate General for Energy Policy and Mines (60 €/kW for peninsular projects, article 16 Order ETU/315/2017; and 50 €/kW in non-peninsular projects, article 14 Order IET/1459/2014). Second, once the installation is built and ready to operate, the developer shall apply within one month for registration in the Operation Status Register.
Before each auction round, the MITECO will publish an Order indicating further details on the requisites to participate and procedures to follow.

• MITECO
• OMIE
• CNMC
• Directorate General for Energy Policy and Mines