Gas Natural joins legal actions against renewables reform in Spain

Sep 19, 2014 - Spanish power utility GasNatural Fenosa (BME:GAS) has joined the appeals against the regulations, published earlier this year, that involve retroactive changes to the incentives regime for renewable energy in Spain.

The appeals filed by some 40 companies and institutions with Spain’s Supreme Court were earlier published in the country’s Official Gazette. Gas Natural’s appeal was announced yesterday together with 15 other filings.

Gas Natural, actually, does not question the remuneration model for the renewable. It attacks two specific aspects of the new regulations -- the calculation of the profitability of some wind farms, mainly in Galicia, and above all the change in rules for waste-to-energy installations using slurry and other feedstocks. Gas Natural has important investments in this type of installations with other partners.

Based on its “reasonable profitability” concept, which came to replace the existing subsidy scheme in the country, Spain recently put a limit on earnings for all existing renewable energy plants, equaling a rate of return of some 7.5% over the life of the power stations. The new regulations aim to deal with the tariff deficit and avoid a collapse of the electricity system in Spain.

The list of companies and organisations attacking the new rules in the energy sector includes the Extremadura government, renewable energy producers’ association APPA, solar thermal association Protermosolar, power utility and pulp manufacturer Ence (BME:ENC), engineering firm Sener, EDP Cogeneration, solar power group Fotowatio Renewable Ventures (FRV), and Finnish paper maker StoraEnso Oyj (HEL:STERV).

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