CPF PRICING POLICY
PROVISIONAL GUIDELINES
Spain has a preference for fixed prices, but understands that in the case of long term agreements (as those concerning PoAs), some flexibility could be introduced. For this type of agreements and regarding variable prices,using a formula where elements that reduce uncertainty are properly weightedshould be considered. In this regard, the reference price should, in principle, have a significantly greaterweight ( 80%) than the variable (CER spot) price.Additionally, the cap and the floor should not be wide, in order to reduce the aforementioned uncertainty.
For each contract, buyersshould be ableto indicatethe Trustee their preference for a negotiating range for the benchmark price,the risk adjustment, the relative weight and the cap and floor.
Regarding the “fixed part” of the formula, the reference price will be the central element. More detailed information should be provided on how the benchmark price will be calculated, and which specific elements will be considered as discounts or premia in order to finally determine the reference price.Another relevant element to be taken into account, regarding the reference price, would be the difference between pre and post 2012 CERs. This can be particularly relevant to calculate the aforementionedrisk adjusted price.
Regarding the “variable part”, the document takes the spot CER as variable price. Other options (particularly, the secondary CER) could also be considered. We would like to receive some information on pros and cons of using the spot CER vis a vis the secondary CER.
Furthermore, we understand that the price is agreed between buyer and seller, while the relation between the coordinating entity and the CPAs implementers is neither part of this agreement nor of the pricing approach. In that regard, if CPAs implementers do not accept the general pricing approach because of the particular conditions of their projects (some may be more advanced, and require a higher premium) this should be solved between the coordinating entity and the CPAs implementers, and should not affect the agreement between buyers and sellers. We would like to get confirmation on this.
Finally, the post 2012 scenario could lead to the revision of the above pricing policy provisional guidelines.