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Spain Temporarily Suspends Renewable Energy Price Supports

Spain Temporarily Suspends Renewable Energy Price Supports
dj
Παρ, 27 Ιανουαρίου 2012 - 18:33
The Spanish government Friday said it would temporarily suspend price supports and other incentives for new renewable-energy installations.
The Spanish government Friday said it would temporarily suspend price supports and other incentives for new renewable-energy installations.

The measure, which is likely to slow further the growth in renewable energy capacity in Spain , temporarily eliminates feed-in tariffs for new plants that produce electricity from wind, solar and other renewable sources.

The tariffs are price subsidies that guarantee that plants producing electricity from those sources generally can charge much more than the market price. The price supports in the last decade have helped Spain surpass some long-term goals for producing energy from renewable sources.

The government said Friday that renewable energy plants covered 33% of Spain 's electricity demand in 2011.

The subsidies have also hit the country's wallet. The government has maintained a price ceiling on electricity in order to help keep those prices from rising too quickly. The accumulated difference between what Spaniards have paid for electricity and its costs of production has grown to EUR24 billion, including interest on debt the Spanish government has to issue to cover the so-called tariff deficit it owes to utilities.

"The government is focusing on a balanced mix" of energy production, said Energy Minister Jose Manuel Soria in a press conference. He added that restricting incentives for new renewable energy projects will help slow the growth of the tariff deficit.

While the changes would not affect renewable-energy projects that have already been approved under the renewables compensation scheme, Soria said the measure would keep 500 megawatts of new renewable-energy projects in the works but not yet approved to receive the subsidies from getting them, saving some EUR160 million.

The government did not say for how long the supports would remain suspended.

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