Spain Explained

Spain’s renewable energy dilemma

Last updated on September 13th, 2019 at 09:10 am.

Using the weather to generate electricity is nothing new. With the increasing depletion of the traditional energy sources you would imagine that increasing the consumption of weather power would be high on every government agenda. However, it isn’t as simple as building more turbines or offering subsidies, as Spain’s recent renewable energy problems show.

A commitment to renewable energy

Spain has, in fact, a good record when it comes to using its weather to generate power. Energy from renewable sources has perhaps always been a strength of a country blessed by countless days of sunshine. Spain has invested in hydropower, wind power, and solar thermal power and has encouraged the building of solar panels through its subsidies.  

And with some success. Red Eléctrica de Espana recently announced that renewable energy had contributed 54% of electricity in April. Around the country you can see the wind mills and solar panels erected by landowners and farmers in a bid to make the most of a terrain that doesn’t always lend itself to agriculture.

The latest investment is an offshore wind turbine at the end of a dyke in the port of Arinaga on Gran Canaria. At 154 metres tall it is credited with being able to supply the annual energy needs of 7,500 homes. The turbine has yet to be certificated and is still officially on trial. If it continues to work as planned then it should begin to contribute to the Spanish electrical grid in March 2014.

There is potential for the further development of wind turbines in Spain given the extensive amount of coastline it enjoys. Certainly the prospect looked good as Spain was the first country to introduce a variable premium system for wind energy and the first to provide bonuses for systems able to supply reactive power to the grid to assist with grid reliability and stability.

However, there is a twist in the tale.

The tariff deficit

Although the Spanish government is keen to publicise its sustainable energy image there are also indications that the policy is feeling the pinch. Renewable energy doubled between 2006 and 2012 but the cost to the government was high.

By 2012 subsidies to all renewables had reached €8.1 billion, a level of support that was in itself unsustainable.The cripling tariff deficit that resulted was, according to Forbes, partly the result of the very low rates that consumers paid and the actual cost of generating and distributing power.

As a result, subsidies to solar power are being reduced and consequently we are seeing a stalling of the growth which was evident in 2008. The cost of fuel is being passed on to the consumer who is meanwhile wondering what has happened.  In 2012 a 7% tax was introduced on all electricity sales in Spain both conventional and renewable and there has been the gradual reduction in subsidies and incentives.

There has been outrage from some quarters as rather than encouraging the use of solar power the Spanish government appears to be penalising those who have installed it. Those people who create their own energy will be charged a fee for doing so. Some people invested large amounts of money in solar panels in Spain only to find the revenue from their investment depleting.   

A plan for the future?

It has been pointed out that these retroactive changes might leave the government open to legal claims from those people who have been encouraged to invest in solar power under what now seems like false pretences.  

It seems a pity that when there have been so many good news stories around Spain’s investment in wind, sun and rain that the record should be blighted in this way.

Perhaps Spain’s plans for renewable energy were too ambitious and the rewards offered in feed-in tariffs too great. However, many people see the cuts to subsidies as a short-term solution to what might have been a long-term gold mine.


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