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Spanish natural gas generators ready themselves for more taxes

26 Oct 2012 16:34:35 | esgm

The Spanish parliament will vote on Tuesday on the government's new draft energy law, a spokesman confirmed on Friday.

Under debate will be the government's plan to increase generation taxes by a flat rate of 6%, as well as a green tax of €0.0279/cubic metres (m³) on natural gas-fired generation, as well as other charges for other fuels.

The law was likely to be passed in some capacity because the ruling Popular Party has a parliamentary majority, the spokesman said.

Both proposed charges would add significant extra costs to a gas-fired generation sector that is already on the ropes.

A combination of a recession-related fall in power demand and the increased role of renewables and coal-fired generation have shrunk the share of the mix available to gas-fired generators.

Spanish law prioritises access to the grid for renewables, while coal has had its share of the mix inflated by both domestic subsidies and by falling wholesale coal and emissions prices.

To date this year, according to nominations data from Spanish power grid operator REE, Spain's combined-cycle gas turbines have generated 32TWh, one quarter less than over the same nearly 11-month period of 2011.

After the vote the draft law in its approved version will go to the senate for ratification, which would probably happen on Wednesday, the spokesman said.

The senate then has one month to reach a decision on the new law.

Any changes it makes then have to be voted through parliament once again, but the law can be adopted straight away if the senate makes no changes.

Additional individualised taxes are also being tabled for coal, nuclear, hydro, fuel oil and gas oil as the government seeks to cut the country's tariff deficit, which is the debt that accrues when regulated incomes are insufficient to cover spending. RS

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