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Spain passes 'prosumer law' for up to 100 kW installations

Highlights

New law allows collective generation

UNEF expects 400 MW per year of installations

Medium term bearish effect on wholesale prices likely

Barcelona — Spain's government has passed a new law which for the first time sets out a specific regulatory regime for electric domestic prosumers, covering installations of less than 100 kW.

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The law -- Royal Decree 244/2019, published Saturday in the country's official gazette, the Boletin Oficial del Estado -- has created a mechanism for prosumers whether they generate an excess or not, and also contains provisions for collective generation and simplifies several other procedures.

Spanish consumers and industry groups have been pushing for a Law to regulate the sector since a previous law passed in 2015 applied a generation tax to such installations, which became known colloquially as a "tax on sunshine." Although that law was repealed in October 2018, the market has been waiting for a specific regulatory regime for small consumers in one of Europe's most sun-rich nations, which is on the verge of a boom in new capacity after grid parity was reached and surpassed earlier this decade.

"The right to collective prosuming and economic reward for producing an excess of energy with net billing are empowering to the consumer," Spain's largest photvoltaic association UNEF said Friday in reaction to the government announcement that it would pass the law.

The association estimates that around 400 MW of new capacity could come online each year as a result.

The new law eliminates economic barriers for consumers, UNEF said, as it removes charges and transmission fees for self-produced energy and for storage systems.

At the same time it simplifies the application process for small-scale installations.

The new law breaks the prosumer into two groups -- individual or collective -- which is particularly useful for small business hubs or apartment complexes, as it will facilitate community generation plants.

Additionally, under the new law, any surplus energy generated can be monetized as long as the generation is renewable and with a limit for the compensation set at 100% of that consumer's demand for each month.

RBC Capital Markets estimated in a research report published Monday that fast deployment could see as much as 6 GW in the medium term, which could account for an output loss of integrated utilities of around 10 TWh. When combined with other developments, this would likely be bearish for wholesale prices, it said.

-- Staff, newsdesk@spglobal.com

-- Gianluca Baratti, newsdesk@spglobal.com

-- Edited by Alisdair Bowles, newsdesk@spglobal.com