Spain unveils draft law to curb electricity prices and promote renewables

The Spanish Council of Ministers has approved the draft law to create a National Fund for the Sustainability of the Electric System (FNSSE), which would support the costs associated with the specific remuneration regime for renewables, cogeneration and waste (RECORE). The FNSSE is expected to avoid electricity price increases, to give clear signals of electrification of the economy, and to provide the certainty, sustainability and balance to the system to boost investments. This fund will be managed by the Institute for Diversification and Saving of Energy (IDAE) and will be financed by a quarterly contribution paid by all energy supply companies (gas and electricity trading companies, wholesale oil product operators, wholesale LPG operators, and major and direct consumers of those products), based on their energy sales, on tax revenues (fiscal measures for energy sustainability) and on the income from CO₂ auctions. It may be complemented with resources from community funds.

In addition, the cabinet has presented a draft law to limit the windfall profits hydro and nuclear plants make, as rising CO₂ prices drive up electricity bills. The text, which aims to reduce electricity prices for households by 4.8% and for large industry by 1.5%, will apply to CO₂-free power plants commissioned before 2005 and the entry into force of the emissions rights market and above 10 MW. Around 90% of the proceeds will be used to reduce charges paid by consumers and 10% to combat energy poverty.