Gianluca Baratti, S&P Global Platts
Summary
The elimination of Spain's so-called "green cent" tax on natural gas used in power generation is set to reduce gas plant output costs by around Eur5/MWh ($5.74/MWh), sector analysts said Monday.
Removal of the tax, currently levied at Eur2.34/MWh (Eur0.65/gigajoule) of gas consumed, will effectively decrease the output electricity cost of 50%-efficient combined-cycle gas turbines by Eur5/MWh, JP Morgan Cazenove utility analyst Javier Garrido told S&P Global Platts Monday.
The action could knock Eur2/MWh off the baseload electricity price in Spain, since gas-fired power stations set wholesale electricity prices for around 30-35% of the year, Garrido said in a note.
The cut is to be open-ended, according to the official Decree Law published Saturday in Spain's BOE state gazette.
On Friday, minister for ecological transition Teresa Ribera had said the green cent tax would be suspended for six months, aligning it with a temporary suspension of a 7% tax on generation. The official BOE text, however, makes clear that suspension of the green cent on gas is indefinite.
Royal Decree Law 15/2018 (Urgent Measures for Energy Transition and Consumer Protection) further clarifies that removal of the green cent tax applies just to gas used in CCGTs and combined heat and power plants.
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