MADRID (Reuters) - Spain’s cabinet approved on Tuesday a decree aimed at smoothing the rollout of renewable energy generation, with measures to combat speculation in the market, cut red tape and overhaul an outdated auction system to reassure investors and lower prices.
Spain wants to make use of rich natural resources including prodigious sunlight both to reduce pollution and create jobs, in response to the devastation the coronavirus has wrought on an economy that relies heavily on tourism and cars.
It follows plans being developed by the European Union (EU) to use low-carbon investments to battle the downturn. Spain is working on joining a handful of wealthy nations embedding targeted emissions reductions into law.
One area the decree aims to address is control over permits to pump power into the grid, which renewable developers complain are being hoarded for profit, pushing up the cost of establishing new solar plants or wind farms.
Responding to the fact that around 60% of outstanding requests for these permits appear to be purely speculative, the Energy and Environment Ministry said it would oblige holders to prove they were building plants or risk losing a deposit.
Power auctions will now be based on the price of energy, a structure the ministry said would allow developers to better plan investments and revenue, and reduce the eventual price of electricity for consumers.
Simplifying other permitting processes should help generate jobs across the supply chain, the ministry said, adding 90% of the components of a wind turbine and 65% of a solar plant can be produced in Spain.
The measures were presented as an urgent decree, meaning they are likely to be approved unchanged by parliament in the coming days.
Reporting by Isla Binnie; Editing by Andrew Cawthorne