Dissent continues in Spain against energy moratorium

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The abyss of debt Spain is currently tumbling into has come to the attention of the European Commission. Following the government’s decision to halt renewable energy subsidies due to an overwhelming debt owed to the industry, the European Commission feels that such a seemingly rash judgment could have a devastating impact on investment opportunities and therefore contrary to what the government wants to achieve. 

Bloomberg reported energy spokeswoman, Marlene Holzner, stated that Spain should not have taken such a decision without prior discussions and industry assessments with key market players.

Yesterday, 40 representatives of energy and environmental agencies presented a petition campaigning against the renewable energy moratorium. The petition expressed that alongside the government’s disregard for the environment and rising CO2 levels and loss of jobs; economically, the renewable energy sector contributes significantly to the wealth of Spain by encouraging investors. Furthermore, through energy-independence, Spain would no longer need to rely on importing gas and oil. It also argues that the cost of renewable energy to the consumer is much less by contrast to the cost of imports. According to the petition, the cost to the consumer is €0.26kWh with renewables accounting for 17% of system costs. Whereas, imports of gas, oil and uranium exceed €40,000 million (unverified figure), which is more than 1.5% of the country’s GDP.

The petition also asks the government to consider the difference between pursuing a future energy crisis and preparing for it. Legally, it says the moratorium goes against the European Directives 2009/28/EC and 2010/30/EC for the energy efficiency of buildings.

“The commission is right to point out that the halt is quite a drastic decision. Yet it’s one of the many fast and clear measures that will be needed to reduce the deficit as much as Brussels asks us to,” said Ivan San Felix, analyst for Renta 4 Banco, speaking to Bloomberg yesterday.

Last week, minister for industry and energy, José Manuel Soria, said the money owed by the government to utilities to compensate them for purchasing electricity from renewable sources could grow by €3 to €4 billion per year if the government does nothing.

However, Sean McLoughlin, vice-president of clean technology research at HSBC, London, spotted a silver lining. Speaking to Environmental Finance, he said, “On the flipside, it’s positive for the green utilities, because it removes the risk of retroactive cuts.”

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