MADRID -(Dow Jones)- Spain’s government is seeking to press ahead with planned cuts in costly renewable energy subsidies in early December, as part of ongoing austerity moves, a spokesman for the country’s Industry Ministry said Wednesday.
The plan, which is designed to make annual savings of around EUR100 million, should be fairly similar to draft cuts discussed with sector representatives in July, spokespeople for the ministry and the wind and solar power sectors said. The cuts are more drastic for solar power generation, they said.
However, the cuts may also effectively shelve projects to build solar power that would have received around EUR1 billion in subsidies in coming years.
Solar power, the most expensive contributor to Spain’s electricity generation, currently accounts for around 3% of Spain’s power generation and around half of renewable energy subsidies. Wind power accounts for around 13% of generation.
Spain is among the countries most reliant on renewable energy–a policy that has made it less dependent on fossil fuel producers but has resulted in higher energy prices, stoking up inflation and hitting the economy’s international competitiveness at a time when domestic demand has weakened.
Spain’s energy commission said the cuts may result in just EUR50 million in annual savings in wind power and another EUR50 million in solar power.
A separate plan to cut some subsidies for photovoltaic solar producers, accounting for most solar power generation, was approved last week.
-By David Roman, Dow Jones Newswires; +34 91-395-81-27, david.roman@ dowjones.com
(Juan Montes contributed to this story.)
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