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Spain and Italy rethink their plan of Renewable Energy Subsidy Cuts

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European countries have been hit hard by the Greek Contagion and are trying to outdo each other in reducing their fiscal deficits.Renewable Energy which is looked upon as good but not as an essential need is facing harsh cuts.Spain is on its way to radically cut Green Energy subsidies as part of broader economic reforms.Note Spain is one of the leaders in this sector with the 2nd largest solar and 4th largest wind market in the world .Italy which has the highest electricity rates in the world at Euro 25c/KwH due to its dependence on fossil fuel imports, has started to become one of the most important Solar Markets in the world.However its recent action on the Renewable Energy Certificate (REC) scheme had led to grave doubts in Investor’s minds.

Spain rethinks its drastic Renewable Energy Subsidy Cuts

Spain has been in the news for a potentially industry killing 30% retroactive cuts on Solar Feed in Tariffs.With the Solar  Association of Spain giving dire warnings and Investors ready to sue the government,their has been apparently  been a change of heart .Recent reports from Spain indicate that the government is rethinking its policy of Green Energy Subsidy Cuts.First  Fotowatio  CEO said that he thought that the retroactive cut would not happen after meeting with the deputy Industry Minister..Second the Spanish government has postponed its recent July 1 deadline on Energy Reforms.It will try and build a consensus on the country’s Renewable Energy policies after talking with the main Opposition Party.It seems a good decision,since Renewable Energy Investment requires first and foremost a stable government policy.This is due to the fact that  the investment horizon usually stretches for 20-25 years and is still dependent on government subsidies as it tries to compete with cheaper fossil fuel energy.

Spain govt seeks consensus over renewables – Reuters

Spain’s government has scrapped a July 1 deadline to reduce renewable energy subsidies and has instead started negotiating a pact with the opposition to give more stability to an alternative energy plan.The multi-party energy pact would aim to boost Spain’s weak energy interconnection with its neighbours, manage its nuclear waste and diversify its energy mix, Industry Minister Miguel Sebastian said on Thursday.Spain’s government can bypass parliament and change the subsidies by decree but has decided to seek consensus on the revision with the Popular Party.

Spain Will Back Down on Solar Cuts, Fotowatio Says – Businessweek

The Spanish government will back down from its plan to cut revenue for most existing solar-energy plants that threatens to bankrupt hundreds of operators, the head of Fotowatio Renewable Futures said.“It wasn’t a concrete proposal,” Rafael Benjumea, chief executive officer of the Madrid-based solar-plant operator, said in an interview. Benjumea met deputy industry minister Pedro Marin yesterday to discuss the plan. “We are confident that the government will rectify its approach and won’t approve a decree with any element of retroactivity,” Benjumea said.Spain plans to cut the revenue by 30 percent for existing solar-panel installations and subsidized prices for new plants by as much as 45 percent, Tomas Diaz, director of external relations at the Photovoltaic Industry Association in Madrid, said yesterday.

Italy retracts on  Renewable Energy Certificates (REC) guarantee cancellation proposal

Italy’s recent budget has a provision which sent the Green Energy Industry of Italy in a tizzy.Italy’s Renewable Energy enforcing body GSE is  the buyer of last resort for Renewable Energy Certificates (REC).Italy has tried to boost the share of renewable energy primarily through the REC scheme.Utilities in Italy have to constantly increase their share of Renewable Energy as a percentage of total Electricity Generation each year as Italy tries to meet its share of the European Union target for 20% Renewable Energy by 2020.Utilities trade RECs with each other depending on the deficit/surplus generation of Renewable Energy by each utility.Excess certificates are sold to the GSE which ensures a floor on the REC price.This provision had come about after a sharp fall in REC prices in 2007.This helps  Renewable Energy Operators getting a decent stable return on their investments.Note this REC scheme applies to all forms of Renewable Energy like wind,biomass etc except solar energy.With a huge hue and cry being raised by the industry,Italy too has retracted and allowed GSE to continue in its role as the buyer of last resort for this year .

Italy to keep buying excess green certificates – Reuters

Italy will launch measures next week to require state energy management agency GSE to continue buying outstanding green certificates from renewable energy producers, a government official said on Thursday.Under Italian law, producers of renewable energy, except solar, receive green certificates, which conventional power generators buy to meet their environmental obligations. The GSE must buy any green certificates that remain unsold.Renewable energy operators had criticized legislation before parliament calling for the removal of this obligation, saying it would lead to a sharp fall in green certificate prices.”The measures will be discussed and approved next week in the upper house (of parliament), and the obligation (for the GSE to buy outstanding green certificates) will remain in place”, Industry Undersecretary Stefano Saglia said on the sidelines of a conference.He said the government wanted to safeguard the investments made by renewable energy producers to the end of this year.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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