Policies

Special Regime for the production of electricity from RES (Royal Decree 436/2004)

Source: JOIN IEA/IRENA Policy and Measures Database
Last updated: 2 May 2017

The Royal Decree 436/2004, passed in March of 2004, amends the previous Royal Decree (2818/1998) and is set up to fit into the existing general framework supporting RES-E as set out by the Electricity Act 54/1997, which is still in force. The Royal Decree 436/2004 provides incentives for new installed capacity of renewable energy sources in one of two ways:

1. Generators, who sell their production to a distributor, receive a fixed tariff that is defined as a percentage of a regulated tariff. The percentage is established on a technology by technology basis. The reference tariff for 2004, defined by Article 2 of Royal Decree 1432/2002, is indirectly based on the production market price, and has a value of EUR 0.072072/kWh.

2. Generators, who sell their electricity on the free market, receive the negotiated market price of electricity, an incentive for participating, and a premium, if eligible.

  • PV: PV < 100 kW receive a fixed tariff of 575% of the regulated tariff (i.e. EUR 0.40/kWh).
  • PV > 100 kW receive a tariff of 300% of the regulated tariff (i.e. EUR 0.21/kWh).

These tariffs remain in effect for the first 25 years, after which the fixed tariff for PV is reduced to 460% (PV < 100 kW) and 240% (PV > 100 kW) of the reference price.

  • Solar Thermal: The decree increases the incentives for the first 200MW of solar thermal electricity production in Spain. Under the first option, solar thermal electricity generators receive a fixed tariff of 300% of the reference price (EUR 0.21/kWh) during the first 25 years after start-up and 240% of the reference price (EUR 0.17/kWh) thereafter. Under the second option, solar thermal electricity generators selling their electricity on the free market may receive as a premium, 250% of the reference price during the first 25 years after their start-up and 200% afterwards plus an incentive of 10%.
  • Wind: The tariff for wind remains unchanged from 1999, where wind electricity producers could receive either a fixed tariff of EUR 0.06/kWh (90% of the reference price) or the average hourly market price of electricity plus a bonus of EUR 0.03/kWh.
  • Other Technologies: The tariff for other renewables, such as hydropower, bioenergy and geothermal receive fixed tariffs ranging between 80% and 90% of the reference price or the average hourly market price of electricity plus a bonus.

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