Spain’s post-election government has approved a plan to offer stable remuneration to renewable projects, in a bid to defuse litigation sparked by retroactive subsidy cuts.
Less than a fortnight after the country’s latest snap election, ministers of the minority ruling socialist party of PSOE have approved a plan that will grant investors 7%-plus in guaranteed returns for over a decade if they scrap ongoing lawsuits over the feed-in tariff (FiT) phase-out.
The decree, given the go-ahead last Friday, aims to “restore stability” for those firms stung when earlier governments slashed renewable FiTs retroactively. Plants up and running since before 2013 will be offered a fixed 7.398% remuneration rate until 2031, but there is a catch.
As explained by the legislative text, the incentives will be denied to firms still pursuing litigation over the FiT cuts or those already granted compensation after winning court disputes. Those pledging to give up lawsuits or the related compensation will become eligible, the decree goes on to say.
The returns offered to all other renewable projects will be 7.09% – 5.58% for those outside of the Iberian Peninsula – and run between 2020 and 2025. These rates will help restore “confidence, stability and predictability” for investors, Environment minister Teresa Ribera said on social media.
The decree also addresses the “fair transition” element of Spain’s clean energy shift, which has seen many coal mines shuttered in recent years. Under the new rules, decisions on which energy projects will replace phased-out capacity will incorporate social and environmental criteria.
PV reps hail decree as Spain enters new political age
The decree represents the latest bid to restore renewable policy stability by socialist president Pedro Sánchez. Within barely a year, his government has tabled plans for a multibillion-euro renewables build-up, overturned taxes for self-consumption and approved major grid upgrades.
Whoever ultimately holds the role must oversee the approval and implementation of Spain’s EU-mandated national climate and energy plan. If adopted in its first draft, the roadmap would commit Spain to taking installed PV capacity to 8.4GW (2020), 23.4GW (2025) and 37GW (2030).