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Interview with Javier García Breva, President of the Photovoltaic-Section of APPA, the Spanish Renewable Energy Association

Mr. García Breva there is much discord within the Spanish PV sector with the current PV promotion scheme in the form of the Royal Decree (RD) 1578/2008. From your point of view: Would it be necessary to amend it and if yes, in which aspects?

For sure it should be amended as soon as possible. But the problems for PV in Spain already started a couple of years before the coming into force of the RD 1578/2008 as a consequence of a persistent bad legislation. The three years it took to amend the RD 436/2004, the errors of the RD 661/2007 which was approved with its targets already reached, with very high premiums and which laid the foundation of an irrational road which ended in the RD 1578/2008, increasing the price of installations, introducing speculation and damaging the development of the national PV industry, is the prelude of the RD 1578/2008. The RD 1578/2008 itself slows down the growth of the Spanish PV market through the establishment of a pre-allocation register and caps, accusing PV of the huge tariff deficit and the raise in electricity bills. The same accusations were made against the same system of a pre-allocation register and caps were extended onto the other renewable energy technologies with the adoption of the RD-Law 6/2009 at the beginning of May 2009.

Nevertheless it is already clear that the tariff deficit for the year 2010 will continue to increment, not because of the growing number of renewable installations but for the coal subsidies, the high gas prices and the extra-peninsula system costs. For the preamble of the RD-Law 6/2009 we know that the costs for nuclear waste, for the free allocation of CO2 emission rights or the extra-peninsula system costs amount to higher quantities than the tariffs and premiums for renewable electricity.

In fact the most negative aspect of the RD 1578/2008 was the introduction of a caps system, which established an annual overall capacity limit for new PV installations amounting to less than the sixth part of the PV capacity installed in 2008. This discrepancy between the quantitative limits introduced by the Spanish government through the RD 1578/2008 and the demand of the Spanish PV market has been demonstrated clearly within the three calls for tender already accomplished since the coming into force of the RD 1578/2008: in each tender the number of applications for ground-based PV installations exceeded between 8 and 10 times the capacity permitted by the cap. Does there exist a more efficient way of slowing down or even stopping the development of a sustainable energy technology? Therefore the caps should be eliminated as soon as possible. What APPA claims instead of a system of caps and registers of pre-allocation is the continuation of an approach based on fixed Feed-in Tariffs and premiums which will be reduced according to the market development as well as the learning curve effects regarding the equipment and PV electricity generation costs.

What is the view of APPA with regard to the loss of jobs caused by the RD 1578/2008?

The effect of the caps and the register of pre-allocation within the Spanish PV industry was the end of two thirds of the whole sector, the loss of more than 15,000 jobs and paralysed the maturation of the national PV industry which had just started to take off. But the impact (of the RD-Law 6/2009) within the Spanish wind sector can be even much bigger: Gamesa having to close production plants or Acciona experiencing losses within its wind division are the consequences of the regulatory risk which the Spanish Industry Ministry is applying to the renewable sector since the RD-Law 7/2006. It will be even worse: the test case which the RD 661/2007 provoked within the Spanish PV sector will now be reproduced through the RD-Law 6/2009 within the Spanish wind and CSP sector. Bubble of projects, purchase and sale of licenses and increase of (equipment) prices damaging the national industry and delaying projects up to three years more. The last round of approved wind and CSP capacities by the Spanish Industry Ministry confirm all apprehensions. The growth of renewables has slowed down and the investment insecurity is rising. The most recent figures from the Spanish Energy Regulatory Office, CNE, speak for themselves: In the first eight months of 2009, only 5 MW of PV and only 150 MW of wind capacity were installed. These figures, if compared to the 2,378 MW and 1,682 MW respectively of 2008, show the magnitude of disaster. The current Spanish legislation regarding renewable electricity is stopping all kinds of renewable technologies.

Will Spain return to lead the global PV industry?

With the amendment shortly of the PV legislation reached (which mainly - I repeat - should include the elimination of the caps and of the register of pre-allocation), and due to the huge solar potential of Spain as well as the technological capacity of the Spanish solar companies, I have no doubts. A big help within this context also would be the fast transposition of the European Directive 2009/28/CE into Spanish law and the presentation and adoption of the National Action Plan for Renewable Energies 2011-2020 which defines the technology targets and the necessary measures to reach a quota of at least 20% renewables in final energy consumption by 2020. With the use of the flexible mechanisms and the integration of renewables within the building and transport sectors, as required by the new Renewables Directive, the targets for Spain can exceed 20% and reach up to 30%. Bearing in mind the development of the Spanish PV market in 2008, this target represents a big opportunity to accelerate the maturity and competitiveness of our sector.