European Commission rebukes Spain for retroactive cuts to renewable energy subsidies

During a press conference in Brussels yesterday, the European Energy Commissioner, Günter Oettinger, said he refused to support the retroactive cuts to renewable energy subsidies in Spain and the Czech Republic, as they would negatively affect investments. In doing so, the Commissioner has joined the heated debate surrounding the impact of these retroactive cuts, especially in Spain’s beleaguered solar photovoltaic sector.
European Commission rebukes Spain for retroactive cuts to renewable energy subsidies

During the press conference, Günther Oettinger said that “forward-looking changes may be understandable and necessary, but the European Commission will not accept retroactive amendments. Parliaments in Spain and the Czech Republic have already discussed retroactive changes in order to relieve public budgets, but we consider that this is unacceptable”. He referred to the Spanish case, where Congress approved Royal Decree-Law 14/2010 establishing a reduction in the number of hours of solar power output that are entitled to the feed-in tariff.

A danger to future investments

According to Oettinger, the Energy Commission has contacted Spain and the Czech Republic to warn them that retroactive cuts would imperil the stability companies need to plan their investments and could even endanger the EU’s renewable energy targets.

The Energy Commissioner said that subsidies are solely the responsibility of Member States, however he stressed that the retroactive measures were not acceptable. “Where costs have fallen, the subsidy doesn’t need to be so high,” he said, “but to encourage investments, financial planning is needed”.

The European Commission believes significant private sector investment is critical to the development of renewable energy, and that the situation will be complicated “if rules are changed retroactively for the worse”. The executive demands that annual capital investments in renewable energy be doubled from €35 billion per year to €70 billion.

Oettinger commented on the retroactive cuts during yesterday’s press conference to present a new Communication from the Commission on renewable energy. The Commissioner also announced a close follow-up of Member States' compliance, that will be assessed on an annual basis, based on the trajectory defined in the National Renewable Energy Action Plans Finally, the Commissioner insisted heavily on the potential for renewable energy in the Mediterranean region, not only within coastal EU Member States such as Spain, but much more from Mediterranean partners of the EU in the region such as Tunisia.

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