Threat of retroactive cut in renewable energy subsidies in Spain puts sector at risk

The Renewable Forum, which brings together key industry associations and was established in Madrid last week, has warned that possible retroactive cuts in subsidies for renewable energies jeopardise the credibility of Spain and increase country risk. As well as threatening the Spanish renewables sector, the measure could prevent Spain meeting its commitments with the European Union regarding energy and the environment.

Five of Spain’s leading renewable energy trade associations, which have traditionally acted independently of each other, have come together to urge the Spanish government to reconsider its approach of publicly backing renewables on the one hand and enacting legislation that holds back the sector on the other.

The Spanish Wind Energy Association (AEE), the Spanish Photovoltaic Business Association (AEF), the Spanish Solar Thermal Electric Industry Association (Protermosolar), the Photovoltaic Industry Association (ASIF) and the Association of Renewable Energy Producers (APPA), have jointly called on the Government to issue “an immediate and unequivocal public statement from the Ministry of Industry, Tourism and Trade (MITyC) dispelling regulatory uncertainty, restoring confidence in the Spanish legal framework, and rejecting retroactive cuts in the feed-in tariffs for renewables and in any regulated economic sector”.

The Renewables Forum also calls for the immediate resumption of negotiations on the future regulatory framework for the renewable energy sector in Spain.

A smear campaign

The leaders of the Renewables Forum (see photo),Luis Crespo, Secretary General of Protermosolar; Javier Anta, President of ASIF; José Donoso, President of AEE; José Maria González Vélez, President of APPA; and Juan Laso, President of AEF, claim that “renewable energies are suffering a smear campaign, driven by their growing presence in the generation mix, which coincides, not accidentally, with the process of defining the energy strategy to be followed by the country over the coming decades in order meet its European commitments and move towards an economic model that is sustainable, low in carbon emissions, and less dependent on energy imports”.

The Renewables Forum believes the campaign is creating “even more uncertainty” in a market that has already suffered from reduced investor confidence since the MITyC introduced a series of legislative changes last year, which is causing “serious damage” to the Spanish renewable energy sector and the country itself.

Possible retroactive cuts in subsidies would, the Forum believes, damage confidence in the regulatory structure in Spain and thereby restrict the financing of new projects. In turn, this would entail the “destruction of thousands of jobs and the collapse of R&D investments”, and “would jeopardize an area where Spain is world leader and which is destined to become one of the motors driving economic recovery”.

Consequently, the Renewables Forum has urged the Government to be coherent in its policy, issue an immediate and unambiguous public statement explicitly rejecting any retroactive subsidy cuts in the renewable energy sector and other regulated industry, and immediately resume talks with industry about the future regulatory framework for the renewable energy sector in Spain.

The Renewables Forum believes that a government that has made renewable energy a “flag bearer” and intends to set an example in this sector to the rest of the world and put its reputation as a solvent country during a global crisis on the line, “cannot act incoherently when tackling the reform of the regulatory framework of a sector which is of strategic importance to the national and European economies”.

For additional information:

Spanish Ministry of Industry, Tourism and Trade


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