thanks again Tom - all very useful stuff - we too continue to try to make the point...

Regards


Tom

  _____  

From: Tom Murley [mailto:[adresse e-mail]]
Sent: Thursday, February 23, 2012 1:26 PM
To: HOWES Tom (ENER); VAN STEEN Hans (ENER)
Subject: FW: S&P Rpt on Spanish renewables policy

Dear Tom and Hans

I hope that this finds you well. I know that you like to keep apprised of regulatory developments. I though that you might be interested in the following:

1. The attached Standard & Poor's report on the Spanish renewable moratorium, which speculates that there could be more retroactive changes

2. The below article from Bloomberg New Energy Finance from today strongly suggesting that hours caps like those on PV may be considered for Solar Thermal and other retroactive changes

3. The attached letter from the Low Carbon Finance Group to the Spanish energy regulator CNE in response to the "consultation" on electricity market reform. I say "consultation" because it was only open for 10 days.

I was in Spain last week and it is clear that a big fight is looming on renewables. Iberdrola all but said that they are pushing for retroactive changes to Solar Thermal and a cessation of all new renewables other than wind, while at the same time fighting against a tax on their fully amortized big hydro (which is still in the rate base as if it were new) and nuclear life extensions.

In the last 18 months about €1.3 billion in equity has been invested in Spanish hydro, solar thermal, solar PV and onshore wind by about 9 European infrastructure funds and financial investors alone - this excludes corporate investment from industrials. The exposure is primarily in wind and solar thermal. This is a far larger exposure to Spain than the foreign PV investors.

I am sure that you are monitoring the situation, but if there is another retroactive attack on renewables investment, with this exposure it will likely have a greater impact than what was done with PV.

Please let me know if there is anything I can do to help, and if you still want information like this. I have attached a PowerPoint presentation that I am giving next months which has some data on the level of financial sector investment in EU renewables


Tom


BLOOMBERG TODAY


SPAIN MAY LIMIT RENEWABLE ENERGY PLANT EARNINGS, S&P, BBVA SAY
22 Feb 2012 / Services & Support (Clean Energy) / POLICY & REGULATION / Spain The Spanish government may impose temporary taxes or caps on earnings on renewable energy plants as it tries to reduce state spending, according to Standard & Poor’s and Banco Bilbao Vizcaya Argentaria SA.
The country, which halted subsidies for new renewable energy projects on Jan. 27, could take “adverse” regulatory action against existing plants including taxes if the economy deteriorates further, the ratings company said Tuesday in a note to investors.

Spain is reviewing the rules governing its energy industry to rein in 24 billion euros ($31 billion) in power-system borrowings backed by the state and curb its budget deficit as it grapples with an economic crisis. The debt is compounded in part by the more than 7 billion euros paid each year since 2010 in premiums to clean energy producers.

Spain’s second-biggest bank expects the government to take additional steps to restrict profits for the renewable industry on top of the moratorium on state funding for projects not already approved.

“We expect further measures to be included in the final regulatory review,” Isidoro del Alamo and Daniel Ortea Hernandez, utility analysts at the Madrid-based bank, said in a note last week. “We think some retroactive measures could be applied even if the principle of reasonable remuneration - that allows some profitability - is honored.”

Measures are likely to include making projects opt for fixed tariffs instead of premiums on top of wholesale prices, they said, a move that would limit potential earnings.

Solar thermal power plants could see their subsidized hours of operation capped for about five years, according to the bank. The cap would be compensated by an extension to subsidized years so overall profitability would not be affected.

In January 2011, Spain approved a similar temporary cap for photovoltaic plants built from October 2008.


  _____  

This message and any attachments are intended solely for the addressee, and may contain confidential or privileged information. If you are not the intended recipient or have received this message in error, you are not authorised to copy, distribute, or otherwise use this message or its attachments. Any views or opinions presented are solely those of the author and do not necessarily represent those of HgCapital. Nothing contained in this email creates a legally binding commitment. Where we intend to create legally binding commitments we will do so by hard copy documents and correspondence. In the UK, HgCapital is the trading name of HgCapital LLP, registered in England no. OC301825 and Hg Pooled Management Limited, registered in England no. 02055886. Registered office 2 More London Riverside, London SE1 2AP. HgCapital LLP and Hg Pooled Management Limited are authorised and regulated by the Financial Services Authority.

  _____