• Beyond Transitions

Spain's shift from laggard to front-runner

Spain’s long-awaited shift towards a more ambitious set of climate and energy policies seems to be taking shape after all. Teresa Ribera, the Spanish Minister for the Ecological Transition, announced today the Government’s decision to abolish the infamous “Sun Tax” implemented through the Royal Decree 900/2015 by the preceding Government, through which self-consumption in Spain got severely restricted by an economically regressive and socially unjust tax.

The new regulation will a) simplify the bureaucratic and technical procedures for obtaining the necessary permits to establish a self-consumption installation below 100 kW; b) recognise and guarantee the right to set up collective platforms of energy self-consumption, thereby supporting the development of localised economies of scale based on collaborative renewables; and c) recognise and guarantee the right to self-consume electric power without additional levies, taxes, tolls or surcharges.

Ribera’s announcement is part of a set of urgent measures approved earlier today in order to tackle the relentless increase in electricity prices that end-use consumers have been absorbing since early 2018 (last month, for instance, markets recorded the highest electricity prices in over a decade – 75.93 EUR/MWh). With the announced measures, the Minister expects to reduce the electricity bill by 4%, equivalent to approximately €1,000 million.

These measures provide a set of short-term impact solutions aimed, on the one hand side, to alleviate the upward trend of electricity prices for end-consumers and, on the other hand, to buy some time for the Government to properly address the structural challenges that the Spanish energy sector faces for adapting its electricity market to a national energy portfolio that will be increasingly shaped by resource diversification, and decentralised supply; all of which are aimed at transitioning towards a carbon-neutral energy system.

Ribera’s announcement brings forward a much-awaited change in the Government’s strategic relationship with its abundant renewable energy sources and, most importantly, with the Spanish people who now have been given back their right to actively participate in the low-carbon energy transition as proactive prosumers, rather than as passive and disempowered price-takers.

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