Spanish new conservative government has decided to stop feed-in-tarif for new renewable installations. The installed ones will continue to receive their feed-in-tarif. Although media coverage has not been too extensive the people around renewable energy are very disappointed.
The responsible minister, Soria, said that it is not definitive but this is impossible to say now. It is very important to contextualize this decision and to understand the possible causes:
- Spanish economy is in a very bad time, and the government is desperately looking for any cost reduction. However the have not touch for the moment carbon subsidies
- Spanish energy production will be higher than demand in a shrinking economy (it was last years with a better situation). So new installations would be redundant economically if others are not shut down, for example the ancient nuclear in Garoña, very similar to Fukushima.
- There is a very-difficult-to-understand thing in the Spanish electric market called tarif-deficit. In two words, recognized costs to the companies are lower than allowed energy sale prices. And this creates a debt that want to stop (this issue deserves many post itself).
- The powerful power companies were asking for something like this.
- Feed-in-tarif has been very successful, with a lot of wind and solar power installed the last years.
But, at the same time the story of feed-in-tarif in Spain and its relationship with politics is neither simple nor free of contradictions. In a very simplistic and undeserved explanation: The former conservative government was the one to put it in practice and many local conservative governments applied it very effusively. During the last 8 years of progressive government the feed-in-tarif suffered some noticeable cuts and a lot of uncertainty, sometimes criticised heavily by conservative local governments. And the fathers have finally kill the baby.
Certainly, feed-in-tarif has helped to save a lot of tons of CO2, develop many new economy companies and jobs (now at severe risk) and for sure help to reduce production costs for windmills, solar panels,… So, it has been a story of success, but at the same time there are many lessons to learn as how to link it with the rest of traditional energy system cost, howto explain it, howto include the big energy players to get their compromise, howto invest in R&D enough of the income, howto plan the amounts of tarif, of installed power and tarif evolution and how to discuss the conditions with the renewable energy sector and howto offer enough stability not depending on the government in charge.
And the future? Uncertain, with some hopes in international markets for some companies, with hope in the not so far grid parity for some others whereas unemployment or great activity reduction will be inevitable for many others. And still with too much CO2 in the air and a changing climate menace in the way.