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International pressure on Spanish government paying off

The international pressure being placed on Spain’s government seems to be working. Spain’s Prime Minister José Luis Rodriguez Zapatero has vetoed the legislative proposal of the Minister of Industry, Trade and Tourism, Miguel Sebastián, and ruled out subsequent cuts in the Spanish system of compensation for solar energy.

Subsequent cuts in the Spanish system of compensation for solar energy have been ruled out. Image: Solarpraxis/Hans-Christoph Neidlein.

Spanish business newspaper Cinco Dias - citing government sources – has reported that in recent days there has been substantial intervention by the major banks on the government. Not only that, but EU Energy Commissioner Günther Oettinger (CDU) should have “strongly warned” the Spanish government about the possibility of making investors feel insecure, thereby jeopardizing the EU’s climate change goals. Tomas Diaz, spokesperson for the trade association ASIF (Asociación de la Industria Fotovoltaica) confirmed this information with pv magazine.

After fruitless negotiations between Spain’s Ministry of Industry and trade associations, it became known on Monday that Spain’s industry minister Miguel Sebastian would unilaterally push through a 40 percent reduction in solar promotion. This led to a storm of indignation among international investors, media and involved associations. If the veto by the Spanish government is enforced, then existing plants under the ‘Real Decreto 661/2007‘ will be spared from the cuts.

However, with the Spanish government concretely wanting to decrease new installations, it remains unclear how Zapatero’s intervention will affect the process. His Minister of Industry has tried to impose a retroactive and global cut in solar electricity. Nevertheless, it is probable that the minister will maintain the originally proposed formula and the cuts of 45 percent for solar parks, 25 percent for roof top installations and five percent for smaller projects.

The tension remains as the industry and associations await the final conclusive papers the National Energy Commission will submit for review on the first of July.