Open letter to Commisioner Oettinger

Jorge-Barredo-UNEF

Dear Commissioner Oettinger,

The Spanish power sector is currently undergoing a new legislative reform which, if adopted, will bring more uncertainty and additional retroactive measures to an already damaged PV industry.

Since 2010, the Spanish Government has been targeting renewable technologies support schemes by approving retroactive amendments to the regulatory framework. As a result, PV plants have decreased their initially expected income by 30%-40%. More than half of the Spanish PV companies have disappeared from the market since 2008. The New Electricity Sector Act currently under discussion in the Spanish Parliament would endanger even more the future of the PV industry in Spain.

More specifically, the new legislative proposal:

· is against European Union legislation,

· represents a radical change of the remuneration system for all renewable energy sources,

· will jeopardize project promoters’ capability to stand their financial obligations to the banking sector,

· will bring several PV plants to an early decommissioning,

· will drive many PV companies out of business.

In particular, the new Electricity Sector Act would severely restrict self-consumption of PV electricity by:

· limiting it to individual projects,

· restricting the type of buildings where projects can be installed ,

· not taking into consideration any form of Net metering,

· imposing a fee on self-consumed electricity.

Such proposals represent a clear setback and have already received numerous negative opinions from a wide range of stakeholders (traditional utilities,

Furthermore, the Spanish Energy Regulator (Comisión Nacional de la Energía – CNE) and the National Competition Commission (Comisión Nacional de la Competencia-CNC), together with the Council of State, have expressed their reservations with regard to key aspects of the draft proposal. In particular, they criticized its retroactive application and discriminatory character towards renewables and self-consumption, as well as its infringement of free trade principles.

More specifically, the CNC’s opinion states: “penalizing self consumption amounts to penalizing only one particular technology, that is, to produce energy through PV panels”. Therefore, the draft Electricity Sector Act has to be considered as not only endangering EU’s renewable energy policies but also as breaching competition rules.

You will find enclosed a background document describing in detail the consequences of the proponed Electricity Sector Act and its damaging effects on the PV industry.

In summary, the proposed Electricity Sector Act undermines the internal market and runs in contradiction with the Renewable Energy Directive. It is retroactive, discriminatory and hinders fair competition. It will seriously damage the investment climate for photovoltaics, not only in Spain but throughout Europe, by turning PV into a perceived risky investment.

We therefore urge you to investigate any possible violation of the European law and take all necessary actions to give a new perspective to the Spanish Renewable Energy Sector.

 We would like to thank you for taking this into consideration.

 Yours sincerely,

–       Winfried Hoffmann, President, EPIA – the European Photovoltaic Industry Association

–       Jorge Barredo, President, UNEF Unión Española Fotovoltaica