Spanish tax the “final blow for wind energy”

 Plans to levy a charge of up to 11% of revenue on Spanish wind energy producers have been condemned by the industry there and are described as being “the final blow for wind energy” by President of the Spanish Wind Energy Association (AEE) Rocio Sicre. Media reports have said that the production of nuclear, hydroelectric and thermoelectric energy would be charged a lower 4 %, with an additional tax of 10 euros per megawatt for nuclear and 15 euros per megawatt for hydroelectric.

EWEA CEO Christian Kjaer has said that ““I am appalled by the proposal of the Spanish Government to introduce a discriminatory tax on wind power generation. Such a tax would destroy Spanish jobs, undermine world-class Spanish wind energy companies and set a very bad precedent for Governments in Europe and beyond. As such it poses a threat to the world-leading European wind industry.”

According to Sicre, the economic impact of the tax would be around €3,000 million; it would reduce the profitability of wind farms by 30% and around 15% of facilities in place could not meet the payment to service the debt from the beginning.

Legally, the tax rate is “dubious”, said Sicre. The Spanish Electricity Industry Act means there is “a principle of reasonable return” he said, and changing the rules mid-game would break the trust of domestic and international investors.

“It is clear that the Spanish Government needs to tackle its deficit. But to impose a discriminatory tax against a world-class domestic industry makes no sense and could ultimately lead to a loss of tax revenue from companies and employees, and undermine the economic growth which Spain so desperately needs. In April this year Commissioner Oettinger told the European wind industry that renewable energy should not be made the scapegoat for the crisis. Sadly this is precisely what the Spanish Government seems to be doing. I urge them to reconsider and to make a proposal that treats all energy technologies in the same way.” said Christian Kjaer.

The Spanish wind farm industry has asked the government of Mariano Rajoy to reconsider the tax and has pledged to contest the measure. “The industry will use all legal avenues at its disposal to fight for their survival” said AEE. As Sicre says “The wind turbines industry is a model: it has always grown according to its objectives, creates wealth and employment, reduces fossil fuel imports, exports technology and the technological image of Spain. Because of this we have to save the wind turbines industry.”

By Tom Rowe,