FITs and Stops: Spain’s New Renewable Energy Plot Twist & What It All Means

Analytical Brief

Faced with growing fiscal challenges and the specter of increasingly trigger-happy credit rating agencies, the new center-right Spanish government has acted to temporarily put a halt to awarding new feed-in tariff (FIT) con-tracts starting in January 2013. The move is expected to have immediate impacts on approximately 4,500 MW of wind power projects, 550MW of solar PV projects, as well as dozens of projects in other technology classes.

The sudden change was passed as part of Royal Decree-Law (RDL 1/2012) in January 2012 – it will prevent proponents of new cogeneration, renewable energy and waste-to-energy plants from receiving contracts to sell their electricity to the grid, effectively putting the domestic RE industry on hold while the government drafts a new strategy for the electricity sector.