Oil Report

UPDATE 1-Spain govt seeks consensus over renewables

* Scraps July 1 deadline for subsidy revision

* Starts talks with opposition towards state energy pact

* Seeks consensus over interconnection, nuclear policy too

(Updates with quotes, detail, background)

MADRID, June 24 (Reuters) - Spain’s government has scrapped a July 1 deadline to reduce renewable energy subsidies and has instead started negotiating a pact with the opposition to give more stability to an alternative energy plan.

The multi-party energy pact would aim to boost Spain’s weak energy interconnection with its neighbours, manage its nuclear waste and diversify its energy mix, Industry Minister Miguel Sebastian said on Thursday.

Spain’s government can bypass parliament and change the subsidies by decree but has decided to seek consensus on the revision with the Popular Party.

“We are going to make a deep revision (of Spain’s energy sector). First we will look at the costs (to the system) then (utilities’) income,” Sebastian said at a joint press conference with shadow economy secretary Cristobel Montoro.

Spain is the second-largest generator of solar power in the world and the fourth-largest in wind power after a rapid roll-out of renewable energy capacity, which has been financed by power utilities through government-backed debt that in 2009 alone totalled 6.5 billion euros ($8.7 billion).

The government has also agreed with the PP to scrap a planned power tariff hike due in June, which could have led to an increase of about 4 percent in consumers’ electricity bills and could have weighed on Spain’s lackluster economic recovery.

“Energy must be the key to economic recovery and the creation of jobs,” Sebastian said.

Renewable energy stocks outperformed after the news. At 1255 GMT Acciona ANA.MC was up 0.1 percent, Iberdrola Renovables IBR.MC 0.53 percent higher and EDP Renovaveis EDPR.LS gained 1.98 percent, compared with a 0.36 percent fall in the Stoxx utilities index. (Reporting by Jonathan Gleave, editing by Jane Baird)