Spain taxes green energy production for the benefit of polluting multinationals

It is a story that has to be seen to be believed. As solar panels become cheaper in Spain, so that it can cost as little as £500 to purchase equipment that will supply your home with all its electrical needs, the Spanish government has decided (a) to charge households for generating and using their own electricity (at such a rate that it costs them more to use their own electricity than to use the public supply), and (b) not to purchase for the grid any surplus they may produce.

Anybody who generates his own electricity but fails to attach his supply to the grid so that his level of use can be monitored and charged for faces a fine of up to €60m! Moreover, companies that have set up renewable energy plants are to lose their subsidies, even though these were the basis of thousands of Spaniards investing heavily in renewables to create a cleaner future.

The current government has not only scrapped these subsidies for the future but is also withdrawing them with retrospective effect, which will bankrupt many of those who were assured that their investment, besides being eco-friendly, was absolutely safe.

The reason the Spanish government is doing this is simply to protect the profits of the giant companies that own nuclear power plants. Prices of Spanish photovoltaic energy have fallen 80 percent this year – it has become extremely competitive and the monopolists are anxious to kill off the competition.

“‘Although Spain has the highest renewable potential in the EU and an obsolete nuclear infrastructure, the government proposes to extend the life of these [nuclear] installations, a move that will profit three private companies,’ said ANPIER [National Association of Photovoltaic Energy Producers] on 27 January …

“For example, electricity generated by Spain’s 460 MW nuclear plant Santa María de Garoña could be replaced with a total photovoltaic surface area equal to the size of Madrid’s Barajas airport, said the association. Such a large photovoltaic complex would create 2,146 new jobs and generate clean, safe and sustainable energy at a cost of around €50 ($67.56) per megawatt hour, while the price of nuclear energy tops €100 ($135) per megawatt hour if all nuclear generation costs are internalised.

“ANPIER maintains that photovoltaic generation clearly has an advantage for Spain when [all] nuclear generation costs are factored in, including costs of disposing of radioactive waste for hundreds of years and construction of necessary civilian infrastructure to avoid nuclear catastrophes akin to the one in Fukushima, Japan.”(‘Spanish solar industry demands national referendum on energy policy’ by Vladimir Pekic, PV Magazine, 3 February 2014)

One excuse is that although Spanish electricity is the most expensive in Europe, it is still sold at less than cost price, giving rise to a debt of some £20bn to the power companies that needs to be repaid if electricity prices are not to rise still further. However, it is clear that it is not renewable energy that costs so much. On the contrary, nuclear energy is twice the price and gives rise to serious problems of how to deal with spent fuel.

Another excuse for charging householders more for generating their own energy than for supplying it to them from the grid is that it costs a lot to maintain the country’s electricity supply infrastructure and everybody should contribute to it. This has been likened to asking cyclists to pay the cost of maintaining petrol stations.

Spain imports over 80 percent of its energy needs, spending more than €40bn – or about 4.5 percent of gross domestic product – a year, and this sum is increasing by €4-5bn a year. It needs to expand its ability to produce its own energy in order to promote its own solvency, never mind hitting its emissions targets and the like. Yet its government is so in thrall to big business that it cannot act for the benefit of Spain, even when the benefits of doing so are so palpable and immediate!