Renewables may be the victor in Spanish election

From pv magazine Spain.

Spain’s Socialist Party, the PSOE, won Sunday’s snap elections as almost 7.5 million Spaniards voted for Pedro Sánchez’ party, which will have 123 of the 350 seats in congress. With the PSOE backing one of the world’s most ambitious climate change policy packages, the result should have had the nation’s renewables industry popping the Champagne corks, but the overriding feeling this week was one of cautious optimism.

“We have to wait and see with whom [the PSOE] will form a coalition.” “Everything will depend on who will support the government.” Those were just two of the responses to the vote given to pv magazine by the representatives of companies that preferred not to be identified.

Whilst renewable energy and climate change did not feature prominently among the topics for debate in the run-up to the latest vote, the socialists’ environmental credentials were clear for all to see. Teresa Ribera, minister for the ecological transition, wants to put Spain at the head of the fight against climate change, and her party won.

The measures proposed by the PSOE in February envisage allocating more than €200 billion in private and public cash – including through public-private partnerships – up to 2030 to meet the objectives of the National Integrated Energy and Climate Plan. Industry, energy efficiency, innovation and renewable energy could generate some 300,000 jobs, according to the plan.

Coalition concerns

The next question for the renewables industry concerns the identity of the parties that will make up an anticipated ruling coalition with the PSOE. The left-wing Unidas Podemos party was reduced to 42 seats and with those losses mainly coming at the hands of the Socialists, the two look a natural fit. That combination, however, would still leave the parties 11 seats short of a parliamentary majority.

That leaves Sánchez facing the possibility of bringing on board nationalist parties of some stripe, with the constitutional pitfalls that would involve, hence the caution expressed by the renewables industry. And with the horse trading continuing, Spain will face another round of votes this month, with regional and European elections due on May 26.

Investment bank JP Morgan has said reform of the wholesale electricity market is necessary for the integration of renewables worldwide and with Spanish voters apparently in agreement, the future for utilities and for traditional carmakers suddenly appears a lot more uncertain. The traditional electricity sector fears a PSOE-Podemos coalition and that uncertainty was reflected in the stock market when trading opened on Monday: Iberdrola, Endesa, Red Eléctrica, Naturgy and Enagás all saw their shares retreat.

By contrast, renewables-friendly power companies Audax and Solaria gained in the aftermath of Sunday’s vote.