Renewables Subsidies

Green energy producers confront government

Group wants clarification on rates amid subsidy cut reports

April 26th 2010

Spain’s renewable energy companies have joined forces to lobby the government to explain its plans for the sector amid reports it is planning to cut the preferential rates received by green-power producers. In a joint statement sent Thursday, the Foro de Renovables platform,which groups together the country’s wind, photovoltaic and solar thermal power generators, asked the Industry Ministry for an “immediate, unambiguous public statement” on its plans in order to restore “confidence” in the sector.

The prime rates paid to renewable producers last year cost the government €6.2 billion at a time when it is straining to bring its public deficit back within the European ceiling of 3 percent of GDP in 2013 from 11.2 percent last year. The Industry Ministry has confirmed it is considering cutting subsidies, but declined to comment on making the reductions retroactive. The shares of companies exposed to the renewable energy sector came under heavy pressure this week in the wake of the reports. “The possible retroactive application […] would jeopardize a sector in which Spain is a world leader,” the Foro’s statement said.

Spain is the fourth-biggest producer of wind power in the world, with the domestic sector accounting for 18 percent of the electricity generated in the year so far. It is also the second-biggest producer of solar energy. The government says it is on track to meet the European Union target of sourcing 20 percent of energy needs from renewable sources by 2020. Renewable-energy producer Renovalia Energy on Friday ruled out the government cutting subsidies offered to existing generators. “No sensible government would do this,” Renovalia joint-owner Juan Domingo Ortega said Friday. Renovalia is due to list on the Spanish exchanges on May 12 through an initial public share offer, which aims to raise as much as €153 million and values the firm at as much as €628 million.

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