Spain poised to bring in reforms

José Manuel Soria accepts that the reforms are bad news for companies that invested in renewables projects, expecting higher returns

José Manuel Soria accepts that the reforms are bad news for companies that invested in renewables projects, expecting higher returns

Spain is today expected to approve a controversial law slashing renewables subsidies to try to reduce a €30bn ($41bn) power deficit.

Several renewables investors have filed international legal complaints against Spain as it has passed a series of measures over the past two years cutting, and some cases eliminating, green-energy subsidies.

The new law, the thrust of which was announced by the government last July, sets the rate of return for existing renewables facilities at 7.4% and 7.5% for future operations. 

The government argues that many renewables firms made double-digit returns on investment with hefty subsidies in the past - something the industry denies.

The decree "is ready to go", industry minister José Manuel Soria tells Reuters, adding that the decision to approve it at today's weekly cabinet meeting has already been taken.

Soria accepts that the reforms are bad news for companies that invested in renewables projects, expecting higher returns.

The new rules will be retroactive to July 2013 and many companies have already made extensive provisions and writedowns in their 2013 financial results, anticipating the impact of the decree.

The regulation reportedly includes variations for a range of technologies - including wind, thermosolar, PV and biomass - and the year the assets were installed.

Assets installed before 2005 are expected to receive no subsidy and will receive only the wholesale power price, while newer assets will receive the wholesale price, plus a separate remuneration.

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