Is the New Premium to Renewables Balanced with the Merit-Order Effect in Spain?

In 2016, 40.8% of the energy integrated into the Spanish electricity system came from renewable sources. During the last years, renewable generation has enjoyed a favourable regulatory, making this technology attractive. Also, the integration of renewable energy in the wholesale electricity market provides cost reduction. However, there is some controversy about the cost of incorporating renewables as a consequence of the premium received by their generators. In 2013, the Spanish government deemed that the existing regulatory should be changed to balance the incomes and costs of the electrical system. This work analysis if the premium paid to the renewable generator is compensated with the savings produced by the participation of renewable generation in the daily-ahead electricity market. The results prove that the imbalance between savings and premium is reducing after the reform. However, an analysis of the wind generation shows a positive balance where savings are greater than the premium.