Spain has many difficulties on the issue of renewable energy. Investing in clean energy is expensive and there are taxes that make the energy transition more difficult. To alleviate these problems, the European Commission (EC) has given the go-ahead to a Spanish regime in which there are some public aid for the installation of renewable energies.
The European Commission has accepted this aid scheme for renewables, since it does not violate any Community norm and contributes to meeting climate objectives. What do these aids consist of?
Aid for renewable energies
The latest renewable energy auctions in Spain have shown the positive effects of competition. This indicates that companies are willing to invest in new facilities based on renewable energy to reduce emissions levels and thus fight climate change.
The Spanish regime, which counts today with about 40.000 beneficiaries, dates from 2014 and grants a premium to plants or producers that generate electricity from different renewable sources or cogeneration.
Competitive auctions and grants
Since 2016, aid has been granted to participate in competitive auctions and those awarded to them can receive compensation only if the price of energy is lower than in current markets.
The purpose of these grants is to be able to compensate for the costs that cannot be covered with sales and allow them to earn a reasonable profit margin as a reward for the investment.
After examining this scheme, Brussels has determined that it complies with EU state aid rules, which allow Member States to support the production of electricity from renewables and cogeneration of heat and electricity provided that the use of public funds "Be limited and there is no overcompensation".
With these grants, it is expected to increase the percentage of electricity that is generated from renewable energy sources and to meet environmental objectives.