Spain’s profit clawback plan ‘would harm renewables investment incentive’

Facebook
Twitter
LinkedIn
Reddit
Email
The proposed law would apply to some solar projects built before 2003. Image: Iberdrola.

A proposed law in Spain aimed at clawing back revenues from emissions-free power plants would create risks for renewables investors and favour fossil fuel-fired generation, according to trade groups that have urged the European Union (EU) to intervene.

The draft law “seriously undermines investment incentives” for decarbonised electricity generation and “reduces the commercial revenues of certain non-emitting companies”, AELĒC, Eurelectric, the European Federation of Energy Traders, the Global Infrastructure Investor Association and WindEurope wrote in a letter sent to the EU last week.

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

Spain’s government has relaunched the legislative procedure on the draft law for a new regulation on the electricity market that will reduce the revenues of non-CO2 emitting generation facilities installed before 2003.

According to the letter, the aim of the mechanism is to contain, on a permanent basis, the impact of higher CO2 emission allowance prices on Spanish consumers by clawing back “excessive revenues” that have allegedly been earned by certain non-CO2-emitting facilities.

Signatories to the letter said the European Commission should enter talks with Spain’s government and express its concerns over a draft law “that is contrary to the EU framework, including the various Commission Communications, that are aimed at incentivising… decarbonisation, by guaranteeing legal certainty and stability for investors”.

The letter noted that investments in solar, wind and storage happen because companies believe that they can make a fair return on them. Spain’s proposed measure “fundamentally harms that investment incentive and creates additional risk for investors”, the trade bodies said.

They added that the proposed law goes against the REPowerEU plan, which says that windfall profit measures should not affect the carbon price signal from the EU Emissions Trading System.

The news comes after Spain’s government introduced a mechanism last year to limit windfall profits of some renewables plants.

According to the letter, the coexistence of the previous measures with the new proposed law “would structurally damage the badly needed non-emitting generation, whose costs are already raising”. The trade bodies said this “would have the effect of favouring fossil-based power generation”.

3 November 2026
Málaga, Spain
Understanding technology and supplier selection for Europe’s utility-scale PV market in 2027. PV ModuleTech Europe 2026 is a two-day conference that tackles these challenges directly, with an agenda that addresses all aspects of PV module, inverter and battery supplier selection; product availability, technology offerings, supply chain traceability, quality assurance, factory auditing, system reliability, and supplier bankability.

Read Next

July 30, 2026
Australia's CEC calls for a national ‘Renewable Resources Payment’ scheme, requiring a legislated payment for every MWh of renewables.
July 28, 2026
Australia's clean energy transition risks being cancelled out by fossil fuel export, ex-Chief of the Defence Force Admiral Chris Barrie said.
July 23, 2026
The average price of a solar PPA signed in Europe in the second quarter of 2026 reached US$74.85/MWh, according to LevelTen Energy.
July 22, 2026
Iberdrola has reported net profits of US$4.9 billion in the first half of 2026, following its divestment from its Mexican operations.
Premium
July 21, 2026
'Home market strength plus Middle Eastern demand' has driven a surge in solar PV capacity in India, according to RenewAtlas and Wiki-Solar.
July 20, 2026
The European Commission has released its final Electrification Action Plan to “make Europe the world’s first ‘electro-continent’.”

Upcoming Events

Solar Media Events
October 13, 2026
San Francisco Bay Area, USA
Solar Media Events
November 3, 2026
Málaga, Spain
Solar Media Events
November 24, 2026
Warsaw, Poland
Solar Media Events
April 20, 2027
Istanbul, Türkiye