13 December 2012 11:30 GMT
21 August 2012 03:22 GMT
By Christopher Hopson in Vienna
Monday, February 04 2013
Updated: Monday, February 04 2013
The government is planning to cap spiralling energy-sector debt, including ending a link between power tariffs and the consumer price index, and restricting pricing options for renewables firms.
Industry minister José Manuel Soria says the moves would save the power sector €600m-800m ($822m-1.1bn) in annual regulated charges, which account for about half of Spanish electricity bills.
As part of the reform, renewables companies will be forced to choose between two pricing options, removing flexibility and potentially hurting future revenues.
In reaction to the news, shares in renewables companies Acciona and Abengoa, seen as the hardest hit from the measures, fell sharply in Madrid trading.
The measures are intended to address the so-called tariff deficit of nearly €28bn, built up over years of keeping prices from rising in line with costs.
To ease some of the sector's pain, the Industry Ministry of Industry, Energy and Tourism announced a €2.2bn emergency loan fund to help cover any shortfall in the power market this year.
The government moves would affect all regulated power activities: transmission, distribution, grids and subsidies for generators, including renewables.
Successive administrations have struggled to strike a balance in sharing the power deficit burden between consumers, companies and the government.
Spain has been hit hard by the eurozone crisis because of its large public-sector deficit and a sagging economy that has been in recession or stagnation for five years, with 25% unemployment.
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