...Lower Cash Flows for Renewables: A new remuneration mechanism for renewables, cogeneration and waste, published in the renewables Royal Decree last week, substantially reduces cash flows of renewables projects in Spain. The reform significantly cuts current premiums for some existing projects and eliminates subsidies for those old renewables assets that have already received high premiums in the past, for instance wind farms built before 2005. Legal tail risk exists as the new measures may be contested in courts. Subsidy Cuts to Balance the System: The new remuneration mechanism reduces renewables subsidies by EUR1.7bn in 2014 (18% of total renewables subsidies in 2013) and is part of broader regulatory measures announced in July 2013 reducing regulated earnings by lower revenues on renewables, electricity distribution assets and also through lower capacity payments for gas-fired plants. Along with other measures, the renewables reform demonstrates the governments commitment to prevent...
